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- [00:00]
Michael Batnik
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- [00:09]
Ben Carlson
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Michael Batnik
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- [00:35]
Ben Carlson
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- [01:01]
Michael Batnik
So my very first policy is going to run up in a few years. Our oldest daughter Libby just turned 11 and I got a 15 year term policy that is about to expire. So I'm thinking about do I need to get another term policy?
- [01:14]
Ben Carlson
Did you ladder your maturities?
- [01:18]
Michael Batnik
I did not. So it's fucking New York.
- [01:20]
Ben Carlson
That's all you have?
- [01:21]
Michael Batnik
Yes, Ben, I know that's the insurance guys are gonna be mad at me. So I need to use Fabric by Gerber Life to see if I can get another policy.
- [01:30]
Ben Carlson
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- [01:53]
Michael Batnik
Welcome to Animal Spirits, a show about markets, life and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain Positions in the securities discussed in this podcast.
- [02:22]
Ben Carlson
Welcome to Animal Spirits with Michael and Ben. Ben, welcome back. How was your vacation?
- [02:27]
Michael Batnik
You don't sound like you care. That was one of those, how are you doing? I don't care.
- [02:32]
Ben Carlson
That's true.
- [02:33]
Michael Batnik
No time for that. Dock is loaded. I can't tell if being on vacation during a bout of market turmoil was a good thing or a bad thing. I'm gonna say it was a good thing.
- [02:42]
Ben Carlson
I would have been in agony.
- [02:44]
Michael Batnik
It was tough. It was. So the day that we had the big 10% thrust higher, however you want to call it, I was on a dolphin cruise with my family. So we went on the little canals of Marco island, and these dolphins are swimming in, like, two feet of water. It was majestic. Come right up to the boat. Dolphins all around us. We saw manatees and stingrays. It was very cool. And at one point, my phone is just blowing up and I'm getting alerts and I'm getting slacks, and I'm getting text messages like, oh, my gosh, are you looking at this? And it was like, the stock market is up 9 or 10% or something. And I looked and I thought, oh, cool. And I put it back down, and I kept watching the dolphins.
- [03:22]
Ben Carlson
Good for you. I saw my iPhone screen time. I think I get it every Sunday morning. So earlier last week, I apologized to Kobe. I felt bad. I was in his bed putting him to sleep, and I was on my phone like, the entire time, just scrolling.
- [03:36]
Michael Batnik
Usually on vacation, I'm, you know, at night I'm reading and sitting on a beer or something. And I definitely was on my computer once. Everyone else was in bed more. But it was also good to be just away from it and seeing all the people that just aren't really paying attention, don't know what's going on.
- [03:56]
Ben Carlson
So a lot of records were made last week, including. We've got 50 pages in the Google Docs. Gotta be close to a record. Including my screen time, I think I was on my phone for seven and a half hours a day, which is way off the charts for me.
- [04:08]
Michael Batnik
2000S is the decade of things that have never happened before. Right. We just keep getting them.
- [04:13]
Ben Carlson
So I told Kobe, I apologize that I was. That I've been on my phone so much. And I tried to tell him, like, it's for work. There's a lot of things going on in daddy's world. So I was showing him stock charts, and I said, are these lines going up or are they going down? And so I was trying to explain to him, like, this is Nike, this is Disney. What other companies do you want to see like? And he goes, what about Hollywood?
- [04:34]
Michael Batnik
Oh, no, you're turning your son into a technical. Technical analyst already.
- [04:38]
Ben Carlson
So he asked me to show him a chart of Hollywood because the day prior to that he was asking about why Minecraft, which he's seen twice now. He was asking why Minecraft isn't at home. Why can't you watch on the couch?
- [04:51]
Michael Batnik
What do you show him? Netflix or Warner Brothers or what?
- [04:53]
Ben Carlson
So I told him, well, when he asked about Hollywood, I was just like, why did he think about Hollywood as a business? Because the day prior he asked, why isn't Minecraft on the couch? And I said, because the business of movies is Hollywood and Hollywood needs to make money by putting them into the movie theaters. And so he asked me to see a chart of Hollywood.
- [05:10]
Michael Batnik
Interesting. But what would your choice be to show Hollywood?
- [05:14]
Ben Carlson
That's a good question. Maybe Warner Brothers, Disney, I wonder. If not Paramount, I guess. But anyway, interesting week in the market. This hit me hard. Our friend Michael Antonelli tweeted, Hearing everyone's thoughts 247 is the worst thing to happen to society. Some mosquito. Now chill out. The actual is. I'm sure you know, it's hyperbole, but it's a good point. And I think especially we're going to talk a lot about some of the survey data that's coming out. And while there is a lot of uncertainty, I think the charts, as crazy as it is, the charts are not commensurate with the action and the damage. Like, there's no way that this is more uncertain than in October 2008, when the future of the financial system was legitimately in question. Like, there's no way.
- [06:03]
Michael Batnik
I want to talk about the sentiment stuff too. How quickly that shifted. I do think, though, that social media and Twitter especially has been, for me, following this, a net positive following along on Twitter. I think there's been a. This has been the best Twitter has been in a long time. I think it's been. Obviously there's always the bad stuff and the bad actors and the people that are just out there to troll or put out disinformation that is always going to exist. But to try to understand what's going on, I think Twitter's been very helpful.
- [06:33]
Ben Carlson
Yeah, I would say that for people, though, that are not target day fund investors like yourself, for people that might be on edge, I think Twitter is the worst place in the world. Because I wrote about this last week in a post called who Are you listening to? And the reason why I wrote it was because in it, like, fighting the markets are hard enough without social media. When you're seeing your account go down and all you have is just. Just the actual traditional media, it's really scary when you have people, professional investors, calling for a collapse or 3,800 on the S&P 500. You are like, the more you see that, the more likely you are to push a button that you're going to regret. And I felt that two Sundays ago. I can't even. I think it was two Sundays ago. Or was it last? I have no. Yeah. Two Sundays ago, when bitcoin was down to 77,000, somebody that I respect was calling for Bitcoin, like, 10K. And I was like, oh, shit. And I really had the feeling of maybe I should. Maybe I should just take my profits and go home. But the point is, replace bitcoin with anything. Like, if you're. If you're on edge and you're seeing everybody's thoughts, to Michael's point, that's not healthy.
- [07:45]
Michael Batnik
I agree. This. This is, to me, the. I think I tweeted about this or put it on blue sky or something. I've never had a period like this where more people that I trust and respect are worried that, like, if, like, it doesn't feel like there is even a contrarian voice out there. There's the. The partisan people who always say, yeah, I'll do whatever you want, but there's no one I trust and respect who's going, yeah, this is actually a pretty good thing. There isn't one person I know who's. Who's saying, like, yeah, this is fine. That's the hard part is, like, you can't even find. Usually in any of the last 15 years, even during COVID people immediately there were certain people who said, like, in April, okay, the worst of it is over. We're economically, we've. So I do that part scare. This is the one that got me from the Wall Street Journal, because they were. They were. There were all these stories about how Trump blinked and said Trump played his cards close to the vest. He told advisors that he was willing to take pain. A person who spoke to a Monday said he privately acknowledged that his trade policy could trigger a recession, but he said he wanted to make sure it didn't cause a depression, according to people familiar with the conversations.
- [08:49]
Ben Carlson
So what are you worried about? He doesn't want to cause a depression.
- [08:51]
Michael Batnik
The fact that that conversation even came up and obviously people who are putting this stuff out, want to get this out there to make sure that he doesn't do something like this, I guess. But I don't know that that kind of thing is one of the reasons that I, I think it was okay that people were freaking out. If you hear stuff like that, I think it's okay to say like, this could. This in some path, this could got, could have gotten really bad or could get really bad if he keeps pressing that button.
- [09:15]
Ben Carlson
We'll talk about the stock market later. Do you agree that the worst of the tariff induced panic is over? I would say unequivocally, yes. I'm not saying that the stock market bottom, the bottom is in, but I don't think we're gonna get another VIX spike to how high? I don't know how high?
- [09:30]
Michael Batnik
Oh yeah, like a two day period of 10% down. No, that was just like, oh my gosh, the shock and awe or whatever.
- [09:36]
Ben Carlson
So the good news is the ability for tariffs to shock us is probably behind us now. The, the potential bad news is like, all right, well what does this do to earnings ultimately? Again, we'll get some of the confidence stuff, but it's bad.
- [09:48]
Michael Batnik
So we could, we could have a double dip correction because the worst of this correction could be over. But if we actually do go into recession, then you, it's going to probably roll over again. So that's the hard part.
- [09:57]
Ben Carlson
Yeah, yeah, yeah, yeah. I could, I could easily foresee a scenario where the lows from last week or the week before don't hold ultimately. But I'm just saying, like the panic from tariffs I think is behind this.
- [10:09]
Michael Batnik
Yeah. The floor has been set very low in terms of like, whoa, this is, it could be that bad. I think. Yeah, you're right.
- [10:15]
Ben Carlson
Cullen tweeted China tariff changes in the last 10 days. April 2, 54%. April 8, 104%. April 9, 145%. April 12 exempts electronics bringing average weighted rate back to 104%. My head is spinning. And then of course, Trump was tweeting Sunday night, I never made any exemptions. But they were, were they not executive orders that came out on Friday that said that? Or, or I don't know, I'm losing track of time. But the messaging, the message is sloppy at best.
- [10:42]
Michael Batnik
Nico Harrison thinks this is very well done in terms of planning.
- [10:47]
Ben Carlson
Okay, so let's talk about like what's going on inside the market and what has markets, people like us paying attention. Mike Bird tweeted the drop in the value of the dollar during AN S&P 500 sell off of this magnitude is really astonishing. There have been 16 sell offs of this scale or larger over five days over the last 45 years. During 13, the dollar rose. This is the sharpest US dollar decline during similar conditions. And the dollar is traditionally a safe haven, as are the dollar denominated bonds, our bonds. You had the worst two week plunge for the dollar since 2009.
- [11:28]
Michael Batnik
You could say, listen, currencies are cyclical. This could be a head fake or whatever. The reason this is concerning to people is this next one from the New York times shows the 10 year treasury versus crude oil versus the dollar. And you have the thing happening at the same time is the dollar's falling while yields are rising. That's the thing that's kind of scary.
- [11:46]
Ben Carlson
Those things and while the stock market was crashing.
- [11:48]
Michael Batnik
Yes. So those two things should not be usually it should be if yields are rising, that tends to portend a stronger dollar. So the fact that you have them diverging like this, cause we've had yield spikes for the past three or four years, that's like yield spike again, then back down yet then a spike, then down that stuff. The narratives are always changing but it's.
- [12:07]
Ben Carlson
The dollar divergence in the flight out of US assets that is particularly concerning. Jim Bianca tweeted the dollar index and US 10 year yields and of course these two lines track each other very, very closely. Until last week they diverged hard, the dollar crashed, the dollar plunged, yield spiked. Here's a great chart from, from Cameron Dawson and her colleague at New edge showing the 10 year treasury yield and economic surprises. And again they tend to follow each other, not quite one for one but they tend to go the same direction. You saw a sharp divergence which is the city US Economic Surprise Index falling. So downside surprises and yields going up. Traditionally when there is a flight for safety, people buy bonds, people buy dollars. And the opposite has happened. This go around.
- [12:54]
Michael Batnik
The most nervous I was was on Tuesday night when it was, I was watching and I was on Twitter until like midnight and people kept posting charts of the 10 years going up, the 30 years going up. That's when I and obviously that's what it sounds like made Trump blink too is the bond market and the, the bond market kind of really scared. But that was the thing that I was going oh no this, this is not, this is not good. In a, in a crisis where 10 year that, that was the most nervous.
- [13:18]
Ben Carlson
I probably was 30 year yields rose 48 basis points. According to Jim Reed, that Deutsche bank that's the largest since the 1980s. The 10 year had the chart from Bianco. Largest gain weekly gain since the early 2000s. Here's another good one. This is from Jens Nordvig. It's a bit wonky, but I think, I think it's important if you are interested in understanding what's going on in markets right now. This simple chart is illustrative. It shows the. The euro dollar that used to trade very closely with the rate differential, CFA stuff. Right?
- [13:53]
Michael Batnik
Okay.
- [13:54]
Ben Carlson
But now the euro US Dollar is moving for entirely different reasons. The rate differential is moving sharply against the euro, but the euro dollar is exploding higher. This is the simplest way to illustrate how the ongoing asset allocation shift away from US Assets is leading to the correlation breakdown. We've got a lot of stuff later in the doc, but it's the flight out of US Assets ultimately. Listen, I, I don't think. Me personally, I'm not terrified of a, of a bear market, right. Like this is. This is what we do.
- [14:23]
Michael Batnik
We help people that into your plan.
- [14:25]
Ben Carlson
We help people through bare markets. But when you have something like this, and ultimately like the fear is. The big fear is the move away from US Assets. Our greatest strength is our ability to export the dollar and import so much cap, so much capital going into our markets. And if that is breaking down, then the entire world is going to look very different. I don't know that I'm there yet. I don't know.
- [14:53]
Michael Batnik
You're not doing a very good job of getting out of the scare stuff.
- [14:56]
Ben Carlson
Getting out of the scared stuff.
- [14:57]
Michael Batnik
Now you're talking about how if you follow on social media, it's all scare stuff. Let me, let me, let me allow some.
- [15:02]
Ben Carlson
No, but I'm saying. I don't know that I buy that. I think that people are being a little hysterical. Even though the data clearly shows, yes, there are assets moving out of the US right now.
- [15:10]
Michael Batnik
I have. It's hard to have, like, not have the cognitive dissonance I have. The one part of my brain is saying, yes, getting hysterical makes sense here. This could be bad. And then the other part of me is saying, hey, chill out a second. Okay, I'm sorry.
- [15:22]
Ben Carlson
Getting hysterical never makes sense.
- [15:24]
Michael Batnik
There was a story from the Atlantic that says there's no coming back from Trump's tariff disaster. America was the world's economic anchor. Thanks to the President, it may never have that role again.
- [15:31]
Ben Carlson
Yes, I will say that all day. Sorry.
- [15:33]
Michael Batnik
Okay, so I pulled this up. The top 25 holdings in the Vanguard World Stock Market Index. 22 of them are US companies. Here's the thing that I will say. January coming into January 2025 was probably the biggest lead the US has ever had over the rest of the world economy. Now, you could, I'm not saying this is the best economy we've ever had. Obviously it was.
- [15:52]
Ben Carlson
No, it's not.
- [15:53]
Michael Batnik
But we were lapping the field. So I think you could say that we probably had the biggest lead then and the lead is going to shrink there from this. I think you could say that. Like, listen, whatever we're doing here is probably going to make the rest of the world step up and they're going to play catch up a little bit. But we have a huge margin of safety. We have the biggest, best corporations. Here's the thing. If you are really worried that Trump is going to crash the economy and he's going to keep pushing these buttons, I don't know, we're two and a half years away from people who are gonna be trying to become the next president. Campaigning, right? How long has Apple been a publicly traded company for? How many years?
- [16:27]
Ben Carlson
That's like my North Star. I have, I have a lot of faith in the American corporation and the.
- [16:31]
Michael Batnik
US I have way more faith in the corporations figuring this out. And I mean, right or wrong, Tim Cook went to the White House and asked for a reprieve and he got it. And that's wrong, right? Well, is that he did what he had to do. Yes, but, but my point is, is that small businesses can't do that. You can't be a small business and go to the White House and get a reprieve on your products from tariffs. So there's going to be people who are going, the rich just get richer and the small businesses guy is screwed. That's the right or wrong thing. Yeah, but, but you're right. They, they have enough money in their war chests to manage this and they, they will figure it out. Even if there's a period of disruption, like these are the biggest, best corporations in the world, eventually, whatever the situation is, they're going to navigate it somehow, even if there's some pain in the meantime.
- [17:17]
Ben Carlson
So I think that I am probably most worried. The probability of a recession, if I were to guess, is as high as I felt it's been in a long time.
- [17:29]
Michael Batnik
That's a good transition.
- [17:31]
Ben Carlson
But wait, what if we only, and I would say this is my base case. I'm not expecting a catastrophic recession. What if we get a moderate recession and we get through this even with tariffs? What do we look back on this period and say we really are unbreakable. Another reason for people not to panic. What would be the takeaway if we really don't get if the worst doesn't come to pass. And it usually.
- [17:51]
Michael Batnik
I do think that a moderate recession would be my baseline just because consumer balance sheets are so strong and we've already proven we handled 40 year high inflation in 2022 and we brushed it off like it was nothing like So I think higher prices from tariffs and stuff, I think we can handle it. Do you. So you mentioned the probability of it. So this is. Kelshi has it and I'm sure it's different now. I pulled this up a couple of days ago. They were saying it's a 52% chance of recession. It got as high as 65 and then when there was some deals in place it went down. Do you think we can trust these betting markets to get the recession calls right in advance?
- [18:26]
Ben Carlson
I think directionally.
- [18:28]
Michael Batnik
Like what, what percentage would it have to be where you say all right. I mean would it be 80% or something? What percentage would it have to hit for you to go? Okay.
- [18:35]
Ben Carlson
Yeah, I guess that sounds about right.
- [18:37]
Michael Batnik
Okay, so here's some Neil Dutta. He was on Oddbots last week. I don't know if you listened to that one.
- [18:42]
Ben Carlson
I did. Joe, by the way, speaking of like I wrote this in the post but who do you listen to? Joe and Tracy are killing it.
- [18:48]
Michael Batnik
Yeah, they're doing, they're doing an odd lots like every day. It's great. People keep. We've gotten a lot of requests to do more emergency animal spirits. I don't think that's our thing is like let's wait and see what everything comes and then put it all together.
- [18:59]
Ben Carlson
Also if our emergencies are just respond to the headlines they're stale in six hours.
- [19:05]
Michael Batnik
Yes. We had a few people comment too like hey guys, this stuff is already old news. It's like everything's old news.
- [19:10]
Ben Carlson
Right?
- [19:10]
Michael Batnik
Right. What, what do you expect? You know, everything's changing so fast.
- [19:14]
Ben Carlson
I was thinking about like it's, it's, it's funny how resilient humans are, how quickly we adjust to the current landscape, whatever the landscape may be. And I was really like yearning for the days and it was only five months ago when there was no major headlines in the markets. Just like oh, Apple is up half percent today just because it was.
- [19:37]
Michael Batnik
Can we go back to worrying about the AI bubble as our biggest concern in the market? Remember that was like that was the biggest concern. Like will there be an AI bubble. Yeah, that's. That's what everyone's worried about. So, anyway, so d. He. He commented on that podcast, and he said, for a business economist like me, calling a recession is sort of beside the point. I don't really care if Ember declares a technical recession. I'm useful when I take an economics outlook and combine it with a market call. Right now, I see very little reason to think growth perks up. And thus I see every reason to remain cautious on the equity market outlook for the economy and stocks. We're still in a sell the rip, buy the dip situation. He's just saying, like, this is the most worried I've seen him in years. Obviously, he's saying, even if it doesn't really become a recession, it's gonna feel like one. But to your point about the sentiment. So this is from Bob Elliot, CEO. Confidence has fallen to its weakest since the gfc, which is crazy that it's lower now than it was during the pandemic, which was one of the most uncertain periods we'll probably ever live through. To your point about the sentiment, if the market and the economy match the sentiment, then, yes, we are coming for a very, very hard landing. But I do agree with you that the sentiment changes so fast that you can't even compare it to the past anymore.
- [20:47]
Ben Carlson
Yeah. If the sentiment ends up. If the economy ends up reflecting the sentiment as of today, then game over.
- [20:55]
Michael Batnik
Right.
- [20:55]
Ben Carlson
I just, you know, I. I still remain a bit skeptical in. In terms of taking the sentiment too literally.
- [21:01]
Michael Batnik
Yes. All right, let's talk about the factory stuff and the. Because I feel like this has brought up a huge debate about the manufacturing sector. So this is from Frank Lawrence. He said. This is from the ft. There was a survey asking America would be better off if more people worked in manufacturing. 80% of Americans agreed. Yes. If more people work in manufacturing, we'd be better off. Then it said I would be better off.
- [21:24]
Ben Carlson
That's a shockingly high number.
- [21:25]
Michael Batnik
Wow. It is very high. Right? You wonder if that's like. But it's a throwaway because then the next question is, I would be better off if I worked in a factory, and 73% of Americans disagreed, and only 2% of people actually do work in a factory now. And that number is probably going to. So I. So they put this in a chart. This is our problem with surveys. Usually it's like, yeah, sure, great. Everyone else can work in a factory, but I don't want to.
- [21:47]
Ben Carlson
Right.
- [21:48]
Michael Batnik
But look at this chart here. I shared this on Slack before it's all employees in service providing sectors and all employees in manufacturing sectors. And you can see manufacturing has stagnated pretty much since the 1950s. It hasn't really gone anywhere. It's slowly but surely drifted lower. But look at how many more people work in service industries now. This is just our economy. We're a service economy, whether you like that or not. And I don't know how tariffs aren't going to change that.
- [22:17]
Ben Carlson
The Wall Street Journal did a really good post about this called how the US lost its place as the world's manufacturing powerhouse. And they said after the 1950s, manufacturing's role in the US economy began to slip. Some of this came about merely because Americans were becoming more affluent to devoting more of their spending to services such as travel, restaurants and medical care. Quote, you get richer. You can only buy so many cars and you start buying services. So, objectively, this is a good thing. Now, I don't want to dismiss the nafta, particularly the world, let's say the wto, concerns about, like, the opening up of China and how that really detonated a lot of middle America, because it did. They said in 1999, the value of Chinese goods exports came to only about a tenth of the US less than Sweden's. So in 1999, China exported less than what Sweden exported. And then the World Trade organization happened in 2001. And then by 2008, Chinese exports surpassed the US in just nine years. Pretty remarkable. Look at this chart. Total goods exports to the world, US versus China. So it definitely was an inflection point. It poured gasoline on a fire.
- [23:29]
Michael Batnik
I think one thing we've learned is that our country is not very good at helping industries that are. That the pivot. The pivot is the hard point, which is a great point of conversation for now. Like, are we, are we going to be able to help people who are disrupted by AI?
- [23:43]
Ben Carlson
No, we leave people not.
- [23:45]
Michael Batnik
That's the problem.
- [23:46]
Ben Carlson
Like, capitalism leaves people in industries behind. It just does. It lifts people out of poverty on the, on the whole. But there are certainly people that get left behind.
- [23:54]
Michael Batnik
I mean, I mean, if this thing that happened over the course of a few decades gets people this mad, what, how mad are people going to get at AI?
- [24:00]
Ben Carlson
Right.
- [24:00]
Michael Batnik
Just imagine, one of the things that.
- [24:02]
Ben Carlson
We don't really capture, though, is services. And if you look at services exports, we're over $1 trillion. China is, I don't know, 400 million. 400 billion. Excuse me.
- [24:11]
Michael Batnik
Yeah, that's, that's what we're good at, right? So I see a lot of people who are putting out posts. It's economists and pundits and analysts putting out posts of, here's what the impact of tariffs are going to be on the economy, on gdp, on spending. And while I appreciate the people that are putting in that time and effort, and it's kind of funny because you can throw it out the window two days later when the tariffs change, but I don't see how you can possibly try to quantify what's going to happen here because there are going to be so many unintended consequences and behavioral changes that it's, it's almost useless to try to say, like, if the world remains exactly the same in a vacuum, this will be the impact because the world is not going to remain the same. Companies are going to change, consumer behavior is going to change. And one of them we've seen so far is that already Europeans are canceling their travel plans to the us. Huge. It's cratering. That's. And this is just one segment, right?
- [25:03]
Ben Carlson
Yep. Visitors from Western Europe who stayed at least one night in the U.S. fell by 17% last year. International visitors spent more than $253 billion on U.S. travel and tourism related goods and services. So, yeah, some of these charts are wild. The FT did this post. Austria, Denmark, Germany. And it's just, it's crashing. Not surprisingly, travel and leisure stocks are getting hit really hard. Las Vegas sands is down 18% just since Liberation Day, down 30% year to date. A lot of that's China, so. But the airline, the airlines are getting murdered, the hotels.
- [25:40]
Michael Batnik
But you wonder if, if the dollar keeps dropping though travel because for years now it's been cheaper to go to Europe for Americans. Eventually it's going to be, if the dollar keeps dropping, it's going to be cheaper for Europeans to come to America.
- [25:53]
Ben Carlson
Yeah, we got an email from a listener who has friends in Europe and they've traveled the world together and they got an email. These people from Germany, they want us to share. Hey, we've taken the decision not to travel to the US this summer. The latest developments by the US governments worry us and disappoint us too much. The tariffs will seriously endanger the world's wealth. We all know that production of neither bikes, nor phones, nor toasters, nor anything else will move back from Asia into the States. The hourly rate of the average American simply makes it too expensive. Instead, the tariffs will hurt the world tremendously. The US inflation will grow very strong as many companies need to raise prices to cope with tariffs like US if we don't do that, we will go out of business. Additionally, we read about situations in the German press where German tourists and visitors are being detained in the US despite having a valid reason of being the country. And holding esta all that together does not make us feel welcome as Germans as Europeans are basically as not Americans. I'm truly sorry. I wish we were not in the situation. I hope something happens in the US Anyway, it goes on, but they're not coming. And this is not an outlier. It's in the data.
- [26:53]
Michael Batnik
No, I think there's a lot of people outside of the US who are looking at us and not happy. So here's my question though. So Torsten Slok posted this chart of total foreign holdings by Instruments. So he says foreigners own 20% of our stock market, 30% of treasuries and 30% of corporate bonds. Could the big outflow, a decent outflow, just sort of cause a further sell off in these things? Could this be a structural thing going forward where we've had a huge growth in foreign investors? Does it matter?
- [27:22]
Ben Carlson
I don't know.
- [27:24]
Michael Batnik
Sure. That's the unintended consequences questions, I guess.
- [27:28]
Ben Carlson
But hard to dismiss it, I think also would be impossible to say. Yes, this will happen.
- [27:32]
Michael Batnik
Right. But one of the reasons that international stocks have been doing so poorly is because people in their own country has been selling them. So I do think this is the perfect encapsulation of why you diversify internationally. Right. This is all people were asking for the past five years. Why would I ever own international stocks a situation like this? This is why this, this data point.
- [27:52]
Ben Carlson
Just had to say, tell me if this is if this inspires confidence or not. Then Wiesenthal tweeted the outlook for new orders from the New York Fed regional manufacturers literally hit the lowest level in the history of the survey. So it's hard to.
- [28:07]
Michael Batnik
Again, we'll see if actions match sentiment.
- [28:09]
Ben Carlson
That's the thing. It's hard to imagine this not impacting earnings. I just don't see any way around it. Now. The degree and the magnitude is up for debate, obviously.
- [28:18]
Michael Batnik
Yeah, margin. I keep saying companies are going to protect margins over workers. So I think the next thing down is corporations and companies are going to be protecting costs. And that probably means layoffs are coming. Here's another thing. Ryan Peterson tweeted this met another US manufacturer who's decided to produce their product overseas where they won't have to pay duties on component imports. We're gonna see stuff like this where you're gonna See stories of companies just completely making everything overseas and it's gonna be the opposite again. These corporations, the plans are so haphazard that corporations are going to be able to figure out loopholes. They're gonna figure out, they're gonna be able to figure this out even if it's gonna be a painful transition period. The news I worry more about the workers than I do about the corporations at this point.
- [29:01]
Ben Carlson
Same the news is, the news flow is dizzying. It's really, really hard to predict or make sense. You know. You know it's a weird phenomenon that we're going to see the, the data that by definition backward looking doesn't matter. Like bank of America reported, I think consumer spending was up 2% year over year in March, something like that. It's like oh great, the consumer is still spending but it doesn't matter what they did in March.
- [29:24]
Michael Batnik
Right. So the next earnings season is not going to matter. The forward stuff's going to matter more than the past stuff.
- [29:30]
Ben Carlson
I would imagine that company that, that stocks will not move on what they did in the previous quarter.
- [29:35]
Michael Batnik
Now earnings beats won't matter.
- [29:37]
Ben Carlson
It's almost always forward looking data or forward guidance but now more than ever. So Connor sent tweeted no way of really knowing when we're on the outside. Oh I forgot to mention this. I'm like there was, there was a report that the Fed would, would step in into the treasury market if they had to. No way of really knowing when we're on the outside but I think it's hard to disentangle Quote Bessant seems to have a little more influence and the Vix is around 40 and the bond market was disorderly last week. Then he said since April 2nd there's been a shock to consumer business confidence. 10 year yields and mortgage rates are up about 30 basis points. Investment grade on high yield credit spreads are wider. The aggregate tariff burden is up a lot. All rollbacks pauses are welcome. But getting back to 42 conditions would be hard. So Nick Timaraos responded the question about who has influence is misframed. Trump is acting off his off of his instincts and his instincts may be guided or reinforced by different advisors at different times. When his instincts are hawkish, it said that his hawkish advisors are influential. Navarro when market concerns override then best will appear to be influential. And so it's just, it's difficult to predict what he's going to do because he acts off of instinct. I was reading Mark Rubenstein substack net net interest which is easily one of my favorites. And he was talking. What was the post was about the bond market and the James Carville quote that went around.
- [30:46]
Michael Batnik
Right, right. From Bill Clinton. And.
- [30:48]
Ben Carlson
Yeah, so it's a really, really good post. So he grabbed a quote from the Art of the Deal where Trump said about the way that he behaves. Most people are surprised by the way I work. I play it very loose. I don't carry a briefcase. I try not to schedule too many meetings. I leave my door open. You can't be imaginative or entrepreneurial if you've got too much structure. I prefer to come to work each day and just see what develops and that's. It's difficult to run the country that way.
- [31:13]
Michael Batnik
Well, especially a trade policy where businesses are literally hanging on all the. Yeah, it's.
- [31:19]
Ben Carlson
So, Ben, you mentioned earlier, like, there's not. All right, so there's, there's obviously parts of conversations that are political. How could, how could it not be? But there's a big difference between conversations where the politics bleed in versus like a partisan conversation. And I think what you were talking about is there's not really a pro tariff economist or a legitimate pro tariff economist. This has nothing to do with red or blue.
- [31:46]
Michael Batnik
Ronald Reagan was against tariffs. George W. Bush was against tariffs.
- [31:49]
Ben Carlson
Milton Friedman is like the father of Republican economics.
- [31:52]
Michael Batnik
Yeah. This is not a Democrat or Republican thing. This is a Donald Trump thing. There's a big difference there.
- [31:56]
Ben Carlson
Right, Right. Yeah. So Nassim Taleb tweeted, give credit where credit is due. True, economists know little about tail risk and finance, but they understand trade. And I've been studying it for the past 400 years. So Matt Darling retweeted and said, you know, it's bad when Talib starts saying economists have a point.
- [32:17]
Michael Batnik
It is kind of funny that during the election people said economists are part of the problem and now economists are part of the solution. It. It all comes full circle.
- [32:26]
Ben Carlson
I guess another part of this is like, what does the Fed do? Because we got an inflation print that went negative last month. No.
- [32:35]
Michael Batnik
So here's the thing. I was going to talk about this later. If you look at the inflation data coming down, if they would have just not done any of this other tariff stuff, the Fed would be cutting and interest rates would be falling right now. So they say that. I totally believe that because no one cared about the inflation print because, again, it's past. People are worried about the future, but inflation data keeps coming in much, much softer than expected. That would have been very good for the Fed to say, all right, we're going to keep cutting and I'm guessing bond yields and mortgage rates would be much lower than they are now.
- [33:03]
Ben Carlson
Yeah. Problem is though, we've got the consumers expected change in inflation rates. The highest reading since 1981. It's, it's up. They expect 6.7% now. Again I, you know, I don't know if this is going to be accurate but people certainly believe it is. And it's funny like what, what are the, what are the some of the orders going to look like from the month of, of April and March? People front running the tariffs, the data.
- [33:31]
Michael Batnik
Well they already said retail, retail sales were higher because people are, the data.
- [33:35]
Ben Carlson
Is going to look very weird. All right, so a lot of consumer sentiment stuff. Timura tweeted Consumer sentiment among self identified independents is now lower than it was at the low point of Biden's presidency when gas prices and inflation were soaring. Torson Slack had a bunch of sentiment data. Consumer sentiment. Families with income greater than 100,000 or less both dropping like a stone. 12 month economic expectations in terms of what are they expecting for unemployment is spiking.
- [34:03]
Michael Batnik
Hey listen, people usually don't admit when they're wrong. I think my one prediction in after the election was consumer sentiment would fly. I think that's wrong. Okay, hand up.
- [34:12]
Ben Carlson
Well it was right at the time. I know people were very excited. Record high share of consumers think business conditions are worsening. Significant decline in household income expectations. So months and months ago we were like what is going to, what could change consumer behavior? Because ultimately we drive the economy. 70% of of GDP is consumers. And I said it has to be, it has to be a loss of jobs. So I still think that this stuff is super is concerning because people's expectations can change their habits. But I think if they don't lose their job they're going to continue to spend, albeit at a lower level.
- [34:52]
Michael Batnik
I did not witness people reigning in their spending on my spring break last week there was places were full, people were spending. But you're right if we start to see a bunch of layoff announcements and I don't if the tariffs remain this high, I don't see how we don't see that where companies just say no no, no, we're not going to take a hit to margins. We're going to cut costs mercilessly to survive this new reality.
- [35:18]
Ben Carlson
But the question is all right, so how much, how much margins are they? How much margin impact are they going to take? How much are they going to pass on to consumers and how many People, are they going to lay off a lot of unknowns, known unknowns?
- [35:31]
Michael Batnik
I'm guessing the latter two are the things that are going to be the most impacted. They're not. They're not going to want to take much of a hit the margin. But there's going to be certain companies, obviously, who say, I can't increase costs this much to my product. People stop buying.
- [35:43]
Ben Carlson
Everybody's preference in the real world should be, let's let the companies eat it. But unfortunately we know that's not how it goes.
- [35:49]
Michael Batnik
That won't happen. Margins increased during 9% inflation in 2022.
- [35:54]
Ben Carlson
Let's talk about the stock market.
- [35:55]
Michael Batnik
Let's do it. I looked at the best days ever. I have a list where I keep of the best days and the worst days in a folder. And yeah, I do this.
- [36:05]
Ben Carlson
You collect bad days and good days.
- [36:07]
Michael Batnik
Yeah, I've been having a lot of bad days lately. So the best days ever. This was the 10th best day since 1928, as far as I'm. As far as I could see.
- [36:16]
Ben Carlson
And that was April 9th, 2025.
- [36:18]
Michael Batnik
Yeah. Up nine and a half percent, by.
- [36:20]
Ben Carlson
The way, for the NASDAQ. The NASDAQ was the second best day ever.
- [36:23]
Michael Batnik
Okay, that makes sense. Which goes back to what, 1970. So the other days in this list, though are 1929, 1930. It's all 1930s in 2008, which I thought we had one of them in 2020, but I guess it was just 9% or so. So take it for what it's worth. These weren't. I guess the 1933 ones were close to a bottom. Obviously the other ones weren't. We've talked about this before. Volatility clusters during a down market. So that update didn't signal like, this is it, it's over. But this other one is crazy, too. So, Sherwood, I think this is Luke Cabo looked at the range of sessions from like the low to the high. What was the lowest point of the day and what was the highest point of the day? And this one is up there. And most of them are now on this list. I think this goes back to the 80s, 2008ish. And that was a crazy. So we were actually down 70 basis points at one point to start the day and finished up 10%. These ranges are crazy. And to your point about the panic we're not going to see, I would assume unless the bond market completely eats it, this kind of panic. Again.
- [37:27]
Ben Carlson
We should have mentioned this chart earlier. This is from bank of America Global fund manager Survey. It's a record number of global investors intending to cut US equities record.
- [37:40]
Michael Batnik
Will we see it though?
- [37:42]
Ben Carlson
Yeah.
- [37:43]
Michael Batnik
Again, this is saying what they think they're going to do, not what they are going to do.
- [37:47]
Ben Carlson
Well, because what if stocks staged a great rally and they just missed their opportunity?
- [37:53]
Michael Batnik
Because look at how far people stayed underweight in 2022 through 2023.
- [37:57]
Ben Carlson
Yeah. Honestly, this chart, not poo pooing it, but it looks very noisy.
- [38:01]
Michael Batnik
That's my. Yes, again, I think this is people telling you have to watch what they say now. They. Or what they do now, what they say.
- [38:08]
Ben Carlson
All right, so let's, let's, let's do some data. Now. When you're looking at like technical damage, there's a million different stats that you could cite to defend whatever point you're trying to make. Okay. So I don't want to say like take this as gospel, the end all be all, but because it's just one data point, but I think it's important. So chart kids showed that on Trump tariff pause day, 98.2% of the S&P 500 stocks advanced on the day. He looked back since 1990, it's only happening happened 15 other times. If you go out six months, the win rate is 100%. And what that means is basically you can only get a day like that after a washout. Right. So intuitively it makes sense.
- [38:55]
Michael Batnik
The word everyone likes to use is capitulation. I'm looking for capitulation. And maybe we had it before then. Right.
- [39:01]
Ben Carlson
You know, the movie industry was survive till 25. That was the mantra during the writer strike. My new mantra for the stock market this year is get fixed by 26.
- [39:14]
Michael Batnik
Okay.
- [39:15]
Ben Carlson
Because there is probably going to be a lot more volatility in, in the days, weeks and months ahead. Ryan Dietrich tweeted a chart, a table, excuse me, that shows that big gains tend to let lead to much higher prices. So he's looking at days where the s and P 500 gains 5%. And what happens next? One month, three months, six months, 12 months and 12 months later, it's higher. 91% of the time. Problem is between now and then, at least historically, and this is mostly 2008. So again, take it with a grain of salt. But there can be a lot of red between now and 12 months. So you got to survive.
- [39:56]
Michael Batnik
All right, let's look a little further out. I did this yesterday with chart kid and I said, so I look at this and there's for some reason there's been a lot of historical 19% drawdowns.
- [40:05]
Ben Carlson
Well, yeah, I went to ask you this near bear markets, and I was mildly annoyed because I was saving this for the show. And then Michael Santoli said it on TV. 19% drawdown. So was my call for avoiding a bear market. Right. I'm joking. This was a bear market.
- [40:24]
Michael Batnik
Yeah. And the funny thing, so the one in 2018 was 19.8%. And you and I at the time said, no, no, no, this is a bear market.
- [40:30]
Ben Carlson
But it was. And so it was.
- [40:31]
Michael Batnik
So there's other ones in 2011. There was one in 1988, 1990, and then 1976 to 1978. So this has happened a lot of times and I don't know why. Yeah. Does a 21% downturn feel worse than a 19? Of course.
- [40:43]
Ben Carlson
Give me a break. It's a bear market.
- [40:45]
Michael Batnik
So I looked at. Okay, and I wanted to keep this simple. Let's say at the end of a month, you go back. I went back to 1950. You look and you're down 15%, which is kind of in the range we're at. You know, we were down. We were down 19 at the worst. Now we're down 12 or something. So I said, if you look at the end of the month, since 1915, you were down 15%. What happens if you buy? Okay, I wanted to use the end of the month because I wanted to use total returns. I'm not a price return guy. So I looked at the average returns. One year later, you're up on average 15% and you're positive 83% of the time. Three years later, you're up over 40%. You're positive 96% of the time. Five years, that's a 66% of the game. And you're positive 92% of the time over a 10 year period. If you bought when the stocks were down 15%, a lot of times they went down way worse than that. Of course. Right. 100% of the time they were positive. And you were up almost 200% in total, on average.
- [41:38]
Ben Carlson
Ben, I see this data and we're role playing. Okay? I'm a nervous investor, Ben. Don't show me this.
- [41:48]
Michael Batnik
Do you see it's different this time?
- [41:50]
Ben Carlson
Do you not see what's happening? Do you not see that the global order is. The guts are being ripped out, we're hurting our friends and making deals with our enemies or whatever a nervous person would say. What would you say to the person that says it? It is really and truly. I know, I know. You can't say this, but it is different this time.
- [42:11]
Michael Batnik
Hey, listen, I got a lot of comments from people saying people felt betrayed by me because I actually put out some negative sentiment in the past couple of weeks. People saying, wait, when did Ben turn into a perma bear? And the thing is, I think, wait.
- [42:25]
Ben Carlson
Somebody called you a perma bear? Did you just make that up?
- [42:27]
Michael Batnik
Now they're. Yes. I'm sure they were being tongue in cheek, but there was people who were saying, when did Ben turn so bearish. I think I. I think we've been trying to be realistic about this whole thing and tell it like it is. And if you look at the history of all markets, hubris has often brought down markets before. There's been many instances of this where hubris and his overconfidence in people's positioning. I've studied this. My whole don't fall for a book was about the people who have brought down industry because they took their ideas too far. So this kind of thing can and will happen. But that doesn't mean that you give up on the stock market for the long term. That's two different ideas in your head competing with one another. And cognitive dissonance says you get rid of one of those ideas. But I still can hold on to both of them.
- [43:12]
Ben Carlson
All right, that didn't inspire confidence. Ben, the stock market has fallen. And risk and risk, ass and risk off assets aren't working. Stocks are falling, interest rates are going up. It's different this time. It's going to get much worse. What are you talking about? How is it. How is it not different this time?
- [43:27]
Michael Batnik
I don't think about all the stuff that the stock market has been through over the past hundred years. World wars, high inflation, low inflation, stagflation, disgraced presidents. It's still up 10% a year. How's that?
- [43:41]
Ben Carlson
Yeah, I'm with you. I'm with you. I mean, this is why it's called the risk premium. Yeah, right. Stocks return more than bonds and cash because they're risky. You have to eat it sometimes.
- [43:52]
Michael Batnik
And again, I have more faith in corporations than I do in any other institution in this country right now that they'll figure out eventually, even if there's some pain in the meantime. And guess what? To your point, there's been a lot of really nice returns, and sometimes you have to eat it on the other side of it.
- [44:10]
Ben Carlson
How about this? If you were to. If somebody were to ask you this question, all right, you want to get out of the market? I understand you're scared. I'M scared. We're all scared. What would be your plan for getting back in?
- [44:21]
Michael Batnik
Okay, well, let's move on.
- [44:22]
Ben Carlson
Hold on, hold on. I'm not done. Okay, so the, the person would, would answer something nonsensical, no offense to anyone, myself included, because what would be your plan for getting back in? I'm gonna get back when the dust settles. That's not how it works. I'm gonna get back in when we fall 10%. What if we don't? So if we can accept that getting back in is probably a fool's errand, that you're probably not going to be able to time the market, getting out and getting back in at the right time, what is a better strategy or what is more realistic? That you can survive and endure some of the pain.
- [44:56]
Michael Batnik
Well, how about it?
- [44:57]
Ben Carlson
Or that you're gonna, or that you're gonna nail the re entry. And when you frame it that way, it's like, come on, how about this.
- [45:02]
Michael Batnik
To people that want to do something? How about a change in allocation? So Christine Benz did this thing and she said maybe you should sell some of your stocks. And her point was, especially if you are either nervous or you're just older and don't have as much time, she's saying, put aside the young people. You should be on your hands and knees praying for this because you can buy at lower prices. But she says if you haven't built up enough short term reserves because you've been focusing on your risk tolerance instead of your risk capacity, your retirement plan is that much more vulnerable to sequence of return risk. That means if you encounter a lousy equity market early on in retirement and need to spend from that declining equity portfolio, that much less of your investments will be left to recover when stocks finally do. So she's saying, listen, even with this current downturn, the stock market in the US is still up 15% per year for the last five years. If you don't have enough liquid reserves, like take your allocation down if you're that nervous.
- [45:53]
Ben Carlson
I am.
- [45:54]
Michael Batnik
Go from 9010 to a 70, 30 or a 6040 or a 50 50.
- [45:58]
Ben Carlson
I'm 1 million percent on board with that. If this is really and truly too much for you, that means that if we do roll over, you're probably going to panic. And so if you have to get yourself right, then do what you got to do. Absolutely.
- [46:09]
Michael Batnik
Yeah. But yeah, you're talking, we're having different conversations. You're talking about going from all stocks to all cash and then trying to get back in. If you don't have rules in place to guide your actions there. You're totally coast. Correct. It's never going to work.
- [46:22]
Ben Carlson
Okay. I love this tweet from Balunas. He said market timing will never die because humans. But man, it took one on the chin today and he was talking about the day when the market rallied 10%. Yeah, I have to imagine a lot more people just join vanguards not changing course. Regardless of what I see or hear, Camp Covid rally to the same thing. Which could be why the inflow seemed to get stronger with each, each new crisis. I think we would honestly going on your intuition. I'm scared. I'm out. I'm, I'm. Oh my God, I'm. I missing a back. It doesn't work.
- [46:50]
Michael Batnik
I think we would need like a seriously a five year bear market to get people to change their behavior. And even then it would only be on the fringes. I don't think people are going to change their behavior because so much of it is automated today. I just don't see this big shift where everyone just decides to get out and you know, I'm done. I don't see that happening.
- [47:11]
Ben Carlson
I mean, here's how it happens. We have like a five year, 60%.
- [47:17]
Michael Batnik
Yeah, it would have to be really, because that's what happened after 2008. That was a, whatever two and a half, three year thing. And there was a lot. There was a decent amount of people who gave up on stocks for a long time and regretted it, obviously. Let's move on to crypto. We haven't talked about crypto much. So one of the soccer dads, I've heard him, he was a late comer to being a crypto evangelist and he went down the podcast hole and now he's all in. I hear him talking to the other dads all the time. Look, about bitcoin, he's a big bitcoin guy and I, I kind of stay in the shadows on that. I don't want to get into these conversations. My only thing I wanted to say was, aren't you a little late to be. I feel like the evangelists, like you either were one and have stayed or you, it's a little late for that. But crypto people would say, you're never too late. So one of the other dads said, listen, this guy's been talking to me forever about bitcoin. Like, I think he kind of talked me into it and he says, I think I'm more on your line, Ben, of being more reasonable, boring, long term investor. What do you think what would you tell a friend in that situation who just now is getting into bitcoin and.
- [48:19]
Ben Carlson
Crypto in terms of buying it?
- [48:22]
Michael Batnik
Yeah, like I would, I would say.
- [48:25]
Ben Carlson
I would say it's super volatile. I still think that it has the potential for asymmetric risk reward. Like I don't think that the stock market is going to gain 3x over the next 36 months. I'm not saying that crypto is or will, but it can. And so if somebody wanted to have exposure to crypto today and they had, they're starting from zero, I would explain to them that it is super volatile, make you puke assets or probably dollar cost average if you want to get in.
- [48:55]
Michael Batnik
That makes sense. One thing I wanted to say is that like the life changing money is probably already made for most people.
- [49:01]
Ben Carlson
Yeah, it's not, it's not going to go from 0 to 85,000 again or wherever it is.
- [49:04]
Michael Batnik
Even if crypto does 10% a year over the next five years, that takes it to 220,000 or something. I, I think if, I know the expectations are way, way higher than people think, but even if the crypto industry did the stock market over the next five or 10 years, I think that's a win. I know people in crypto would not think so, but I, I, I would think so.
- [49:25]
Ben Carlson
I saw, I think Hogan tweeted this, that crypto has outperformed the S and P for the last like 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12 anyway, but it's been, it's been, it's been a brutally volatile asset. So if you are just coming into it like you got to expect, you got to expect some pain.
- [49:40]
Michael Batnik
Thinking about the volatility, I think after watching the crazy back and forth in the stock market, I would never do this, but I understand real estate investing more and more each year. Just the fact that the volatility is completely laundered out of the system. And there's obviously other risks there. And I'm speaking mostly of residential real estate investing, not commercial because obviously there's parts of that that get hit.
- [50:03]
Ben Carlson
But you can't overstate how brutal it is seeing prices on the screen every day, like for your mental health.
- [50:08]
Michael Batnik
And I know you can see the zestimates and stuff, but I understand that. It's just not for me, but I understand it more. And there's obviously, but wait, hold on.
- [50:16]
Ben Carlson
Who'S checking the zestimate every day?
- [50:17]
Michael Batnik
Well, true, but, and there's other risks. I had a friend who said, listen I was trying to build out a portfolio of rental properties, and I bought one in 2021. And the plan was to then refinance it and then buy another one and then refinance that and buy another one. And then when rates shot up, my whole plan got, now what? I can't do that anymore. And so there's other risks to the investing in that space, but I do get it. So mortgage rates are back above 7% now, which is crazy. So that is housing just going to be stuck for. For a very long time?
- [50:50]
Ben Carlson
I don't know. I mean, if the economy softens, you would expect interest rates to come down. I don't know.
- [50:56]
Michael Batnik
I do think so. I was. We were in Marco island for a spring break, and there was houses for sale everywhere, for sale signs all over the place. And I looked up on Zillow and tons of price cuts. I do think in certain areas, it's going to be kind of a buyer's market. And if you could. If you could stomach the 7% mortgage rates for now and say, listen, they're going to come down. If you really think the economy's going to crash, guess what? Mortgages are coming down. I do think you could probably be in a very good negotiating position with people this spring. I think it's probably not.
- [51:28]
Ben Carlson
Are your wheels turning?
- [51:31]
Michael Batnik
No, I. I did. I did see myself more retiring in Florida, though.
- [51:35]
Ben Carlson
The.
- [51:36]
Michael Batnik
The older I get, the more times I go there. It's also funny because you see the. It makes sense why the houses are more expensive there. They're building a bunch of houses around there because they're knocking down these old houses and building new ones, and they're building them with cinder blocks as opposed to framing them because of the tornadoes, you know, so of course the houses are more expensive.
- [51:52]
Ben Carlson
All right, this is kind of nonsensical. The University of Michigan respondents making unsolicited comments on government economic policy news. The percent of respondents making negative comments is. We've never seen a chart like this in this data set. We've never seen a spike like this in this data set.
- [52:10]
Michael Batnik
I should say, I think it's funny that they actually track this for this long. Right. Unsolicited negative comments on government economic policy news. I guess they track everything, but it goes back to 1995. All right, this one was floating around. I thought it was interesting. So this is from unusual whales. 60% of general admission ticket buyers at Coachella use Buy now, pay later to finance their tickets per billboard. And people love to dunk on the Buy Now Pay later stuff.
- [52:33]
Ben Carlson
It's a better financing option. It's better than a credit card. I get it.
- [52:36]
Michael Batnik
But let's say. Yeah, let's say if you Change this to 60% of people used credit cards to buy their tickets. I use my credit card for everything. What if young people are just using these as credit cards? They probably are, right?
- [52:45]
Ben Carlson
Yeah.
- [52:46]
Michael Batnik
So this is kind of a non issue to me. I know people love to dunk on it and say, oh, my gosh, people are borrowing money to. No, they're using the system to not pay it right away. Right.
- [52:58]
Ben Carlson
I think so.
- [53:00]
Michael Batnik
Are you still a Howard Stern listener? I can't remember. I know you've always been a big fan. Do you have time to listen to him anymore?
- [53:06]
Ben Carlson
Yeah. So Howard Stern was a very, very important person to me. Like, I grew up watching on E. Back when my mother told me to turn him off in the early 90s.
- [53:20]
Michael Batnik
That's how I got to know Howard's turn. I would watch the replays on E.
- [53:23]
Ben Carlson
At night, and I was a daily listener. Well, I listened when he was on the Fan, not Fan on kroc. But I got serious when he. When he went over. What year was that? 07. I don't remember exactly.
- [53:36]
Michael Batnik
That was huge news.
- [53:37]
Ben Carlson
And I listened every day until probably 2019. And I let my subscription lapse, which I have very mixed feelings about. I feel bad that I don't listen anymore, but I listened for almost 20 years. He's out of stage.
- [53:56]
Michael Batnik
You had to run.
- [53:56]
Ben Carlson
Yeah. But I do love Howard.
- [53:58]
Michael Batnik
I asked that because he had Mike White, the creator of White Lotus, on, and White went to town on a lot of people. And the Hollywood Reporter did this piece that kind of pulled out the best quote. And it was funny because he was mad at people for nitpicking the show Season three, which I get why people nitpick. There was a lot of stuff to nitpick. I've never been a big fan of nitpicking TV shows and movies. Like, I understand that these things aren't real, and I'm okay to suspend reality.
- [54:24]
Ben Carlson
Hang on. Didn't you nitpick last week? Or was I talking? Was I thinking about somebody else?
- [54:29]
Michael Batnik
I'm sure I did. What did I nitpick?
- [54:30]
Ben Carlson
Weren't you nitpicking how unrealistic it was, the ending?
- [54:34]
Michael Batnik
White Lotus? No, I never did that.
- [54:36]
Ben Carlson
You didn't? I'm gonna check the tape.
- [54:38]
Michael Batnik
I enjoyed it.
- [54:39]
Ben Carlson
Okay.
- [54:40]
Michael Batnik
I think I said there's stuff you could nitpick, but I liked it. I still enjoyed Season Three. Even though it wasn't as good as the others.
- [54:45]
Ben Carlson
I'm so tired of complainers. You're so right. Like, I think that White Lotus became so big that people like, eh, it wasn't as well.
- [54:52]
Michael Batnik
There's a lot of people these days who their whole personality is. I hate the thing that's popular. So I get that. That's an inner personality.
- [54:58]
Ben Carlson
I would agree with the overall sentiment that this was easily the weakest of the three seasons. I enjoyed the hell out of it, even if there are plenty of nits to pick. But I was thinking about this because.
- [55:11]
Michael Batnik
It was just great characters. That's the thing I like about it.
- [55:13]
Ben Carlson
At Passover, somebody in my family. So there's a couple. So what do you do in the situation, you know, when, like, when a couple is so united on a show that you disagree with? Like, obviously you're not going to like, fight. Who gives a shit? You know what I mean? You're not going to like.
- [55:25]
Michael Batnik
You just have to bite your tongue. My wife and I run to this all the time.
- [55:27]
Ben Carlson
Yeah. So. So the two of them were just piling on White Lotus. It was so predictable. This never could have happened.
- [55:35]
Michael Batnik
Right.
- [55:36]
Ben Carlson
And I'm just like, what? It's just. It's an. It's an awkward situation. I want to be like, I liked it.
- [55:42]
Michael Batnik
Yeah.
- [55:43]
Ben Carlson
But I'm not gonna, like, go back and forth. I don't care.
- [55:45]
Michael Batnik
Fine.
- [55:45]
Ben Carlson
I didn't like it.
- [55:46]
Michael Batnik
So anyway, the reason I put this in here is because Stern asked him, like, how much money are you gonna make? Cause he's renegotiating, and this is interesting. He said, we are renegotiating right now. I'm definitely curious to find out what the amount is because he obviously, it's a huge show. He could ask for a lot of money. He said, I feel like I have financial security for sure. At a certain point of money, you wonder, is this going to make me worse? Is having more money just going to make me more dysfunctional? I feel like if you're thinking that way, you're probably going to be okay.
- [56:10]
Ben Carlson
Yeah, agreed, right?
- [56:12]
Michael Batnik
It's the people who don't think that way that are going to probably be in for problems.
- [56:15]
Ben Carlson
I was listening to the Midnight Boys yesterday talk about the premiere of the Last of Us, and this blew my face. Which show do you think is more popular? White Lotus or Last of Us?
- [56:32]
Michael Batnik
Last of Us.
- [56:33]
Ben Carlson
Why would you say that? Because I set it up that way?
- [56:35]
Michael Batnik
No, because zombie thing. People love zombies.
- [56:37]
Ben Carlson
Okay, well, in your personal life.
- [56:39]
Michael Batnik
Oh, yeah. White Lotus is more meaningful in my personal life. But I could see Last because it was a big video game phenomenon.
- [56:45]
Ben Carlson
So Last of Us has twice as many viewers as White Lotus.
- [56:49]
Michael Batnik
Okay. I would have expected that Twice as many wells. Like, not a lot of people watch succession either. All right, I have some. I have some further travel thoughts to get off my chest here. I taught my kids how to play shuffleboard. They had this little park right down the street from U.S. community Center. You could get the shuffleboard stuff. And my kids loved it.
- [57:05]
Ben Carlson
Good fun.
- [57:06]
Michael Batnik
And there was a bocce ball court next to it. In retirement, that's going to be my thing. I'm going to be a shuffleboard player in bocce ball. Those are my two drinking. Like a drinking game has to be where you can hold the drink in one hand and still play the game in the other.
- [57:17]
Ben Carlson
I don't know from bocce ball. Is that shuffle ball?
- [57:20]
Michael Batnik
No, no, no. Bocce ball is where you throw the little ball and then you have the other big ones that you throw to try to get closest to it. It's an Italian game.
- [57:26]
Ben Carlson
Okay, great.
- [57:28]
Michael Batnik
You never played it before?
- [57:29]
Ben Carlson
I don't think so.
- [57:30]
Michael Batnik
I'm still on the. I think I've mentioned this before, but having the Airbnb VRBO thing with kids is so much easier. Cause one of the nights too much ice cream in the middle of the night. I'm sitting there, I'm about ready to go to bed. I think I'm watching the markets on my phone, and my daughter Kate comes out and says, I threw up. And I walk into her bedroom and it's literally chocolate ice cream. And she's in the bed with my other daughter because they had to share a big king bed together. And luckily, you know, our house had extra, extra sheets. I threw in the wash, put the new sheets on, back to bed in 15 minutes. No problem. That would have happened at a hotel. How long would the process have taken? Right.
- [58:05]
Ben Carlson
And the whole room would have stung forever.
- [58:07]
Michael Batnik
Yeah. One other thing. So the new big thing these days, I guess it's not new new, but is just very low calorie beer. So Michelob Ultra was the one that really set this in motion. So I got. I got a 12 pack of Corona Premium, which is their. They have Corona Light and Corona Premium, which are basically the same thing, but Corona Premium is their Michelob Ultra. And it just got me thinking, like, where did they come up with the name premium? And I'm sure it was just someone in the marketing team said, like, they Put it in a chat. GPT. Like what's a word that's kind of similar to ultra but not ultra, right? They just Corona Premium is just someone give us a word that's kind of like ultra but not really ultra. And that's what gave it. It's an okay beer. One more thing. I think I lost a step. I'm sure you did remember me and you did our race a couple years ago. My daughter.
- [58:52]
Ben Carlson
I was faster than you thought you were.
- [58:55]
Michael Batnik
But I think I've lost a step because my daughter plays soccer and she's kind of like me. Where I never had breakaway speed. I was always quick, right. I'd probably do better at the, the shuttle run than a 40 yard dash. My daughter's the same way in soccer. She's quick but she's not like breakaway speed fast. So she wanted to go for a jog to stay in shape. And at the end I always tell her the last block, we gotta go all out and till we're done, till we get to the mailbox, right? You sprint till the end. And she took me off the line. I had to like try hard to come get. I was like ready to go and she took, she beat me off the line and I thought, oh my gosh, I'm losing a step. I can't believe it. I don't feel like I am, but I obviously am.
- [59:29]
Ben Carlson
I mean, you're basically mid-40s.
- [59:31]
Michael Batnik
I am mid-40s. I'm going to be 44 this year, so.
- [59:35]
Ben Carlson
All right, you had a good run.
- [59:37]
Michael Batnik
Recommendations, what do you got?
- [59:40]
Ben Carlson
I am like all in on Apple TV all of a sudden.
- [59:46]
Michael Batnik
High quality.
- [59:47]
Ben Carlson
I binge watched Sepherance which was a massive, massive mistake. That show is the least bingeable, most meant to be watched week to week show on tv.
- [59:59]
Michael Batnik
Oh, that makes sense actually. You want to like think about it a little bit and let it set in.
- [60:02]
Ben Carlson
Dude, I had no idea what was going on. Not a clue, honestly.
- [60:06]
Michael Batnik
Did you like the finale though?
- [60:07]
Ben Carlson
Yeah, I love the finale. I listened to podcast recaps and I still didn't know what was going on.
- [60:11]
Michael Batnik
Yeah, it was that.
- [60:12]
Ben Carlson
That is a week to week show. I really, I royally bungled that one.
- [60:16]
Michael Batnik
The finale where the Innie and the Audi are talking to themselves through video was so really good. Yes, very good.
- [60:23]
Ben Carlson
All right. Did you watch your friends and neighbors with Jon Hammond?
- [60:26]
Michael Batnik
I didn't start it yet, but it's on my list.
- [60:28]
Ben Carlson
So the premise of the show is he's a rich guy, hedge fund, something something.
- [60:34]
Michael Batnik
Geez. Rich Guys are having a moment, aren't they?
- [60:37]
Ben Carlson
But things go south, he loses his job, and he's gotta keep up, and he starts robbing his neighbors.
- [60:42]
Michael Batnik
Okay, all right. I did see the preview.
- [60:44]
Ben Carlson
Good premise.
- [60:45]
Michael Batnik
I'm a Jon Hamm fan, so I'm. I've stuck to him since Mad Men.
- [60:48]
Ben Carlson
Dope thief continues to be great. The main actor is phenomenal. Phenomenal. Forget his name, but it's a lot of fun. Also on Apple. And then lastly, I know you're not as into it as I am. I don't care that it's predictable. And it's Curb in Hollywood. I mean, what could be better than Curb in Hollywood? I love the studio. I'm really. I'm really, really enjoying it.
- [61:05]
Michael Batnik
You're all in. I. I'm surprised you like that one as much as you do, but I guess.
- [61:09]
Ben Carlson
Well, I love Hollywood. Like, true. So is it. Is it a blatant knockoff of Kirby? I don't care. I'm in. I don't know if we spoke about the Pit. How. How phenomenal was the pit.
- [61:20]
Michael Batnik
All right. I was gonna talk about this. Two finales. The Pit was great. I thought the finale landed the plane and still left some. Like, I want to see season two. It's just. It's such a high quality show, and it's not like these new shows where the whole point of it is you're waiting for this big thing to happen at the end. It was not so much the. It was the middle of the show. The meat of it that, like, the stuff with the shooter at the concert was so well done. And you think about it from some completely different angle. And, like, I never thought about, like, the hospital having to deal with this. And it was. It was so good.
- [61:50]
Ben Carlson
You know what?
- [61:50]
Michael Batnik
Just Wiley doesn't win an Emmy, then.
- [61:52]
Ben Carlson
I think he's gonna win all. They're gonna win all the awards. We mentioned earlier in the show, Survive Till 25. I'm thinking, like, man, I am just loaded with TV shows. This is. This is it.
- [62:01]
Michael Batnik
Yeah.
- [62:02]
Ben Carlson
Like, it wasn't. It wasn't the movies, because the movies have been. Have been.
- [62:05]
Michael Batnik
You're right. They all came out.
- [62:07]
Ben Carlson
But I'm wondering, like, because my friends, like, hey, what are you watching? Like, I'm watching a million things. I don't think I've ever been this busy with tv, but it is. It is because of the writers strike.
- [62:13]
Michael Batnik
It was all, oh, yeah. So we also finished 1923. And I told you, I really liked the season. The finale stunk. It was just Me and my wife were both like, wait, that's how it was. Like it was a series finale.
- [62:25]
Ben Carlson
Oh, series. But you know what? Those are like, those Taylor Shedden shows are like very low stakes. You know what I mean? They're not serious.
- [62:32]
Michael Batnik
I just couldn't believe the ending. It was kind of like, wait, that's how they ended it.
- [62:34]
Ben Carlson
Okay.
- [62:35]
Michael Batnik
Oh, so I didn't love it. Okay. I haven't done any movie recommendations, so I got two with my new scoring system. So I watched a complete unknown on my plane, on one of my plane rides. That's the Bob Dylan one with Timothy Chalamet. I thought it was really boring. His performance was good, but not nearly as good as Joaquin Phoenix and Johnny Cash. I think that's like the all timer for the. Like, there's the Johnny Cash movie, the Ray Charles one with Jamie Foxx, and then this. And I think this one is easily in third from those movies. Like it was just kind of a boring movie. And people said his performance was like transcendent. And I thought like, he sounded like Bob Dylan. I'm not a huge Bob Dylan fan. I'm kind of a take it or leave it with him. Like, hey, he's got some good songs. I know people love him. So that's like a 5.9 for me.
- [63:13]
Ben Carlson
Okay.
- [63:13]
Michael Batnik
Okay. My wife and I watched Civil War on Apple or on hbo. I know you watched that a long time ago. We finally watched it. That's like a six'four to me.
- [63:23]
Ben Carlson
Okay, but wait, that is the one of like the ultimate examples of meant to be seen in the theater. Because hearing the bullets whizzing and seeing that on the big screen was an experience. If I saw that on the couch, huge step down.
- [63:38]
Michael Batnik
I mean, I've heard people complain about the movie. I heard people that liked it and people hated it. Like the fact that they didn't really explain what was going on. They didn't give us any like even breadcrumb of why is this happening?
- [63:48]
Ben Carlson
Yeah, it wasn't. I enjoyed the shit out of it. Did you like it?
- [63:51]
Michael Batnik
I liked it. It was, it left like it was kind of one of those, like, ah, that's pretty good. Not great, not bad. So I.6.4.
- [63:58]
Ben Carlson
Okay.
- [63:59]
Michael Batnik
That's all I got.
- [64:01]
Ben Carlson
All right. What a week. What a week. We're going to. We're going to make it. Could be some bumps and bruises. Economy was softening coming into the liberation day. Going to soften further. But we have faith. We have faith in the American people, do we not?
- [64:18]
Michael Batnik
Sometimes to be a long term investor. You have to survive the short term. That's my talking point.
- [64:24]
Ben Carlson
Okay, Animal spirits@the compoundnews.com Personal emails, always personal responses. Thank you very much for listening, for sticking with us. We'll see you next time.