The Leverage Mania (EP.388)

Summary

Animal Spirits Podcast – Episode 388: The Leverage Mania

Release Date: November 27, 2024

Hosts: Michael Batnick and Ben Carlson
Podcast Description: Animal Spirits is a show about markets, life, and investing. Join Michael Batnick and Ben Carlson as they discuss what they're reading, writing, listening to, and watching. New episodes are released every Wednesday morning.

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1. Market Tops and Stock Concentration

Discussion Highlights:

• Technology Sector Dominance:
  The hosts delve into the extraordinary performance of the technology sector, highlighting that since 2014, technology stocks have surged nearly 800%, with consumer discretionary up by 271%. This has led to a significant concentration in the S&P 500 market capitalization.

• Record High Concentration:
  Bank of America reports that the top 10 companies now account for 36% of the S&P 500's total market cap, compared to 27% during the 2000 dot-com bubble. The top companies include Microsoft, Apple, Nvidia, Alphabet, Amazon, Meta, Berkshire Hathaway, Eli Lilly, JP Morgan, and Broadcom.

• Implications of High Concentration:
  The hosts discuss concerns regarding market concentration, questioning whether this signifies a market top. Ben Carlson remarks, "There's going to be something too early," expressing skepticism about dismissing concerns prematurely.

Notable Quotes:

• Michael Batnick at [06:11]: "I don't know that extreme concentration is a good thing."
• Ben Carlson at [07:36]: "It's got to be playing huge mind games of you at this point."

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2. Innovation and Bubbles

Discussion Highlights:

• Book Review – "Bubbles in the End of Stagnation" by Bernd Hobart and Tobias Hubert:
  Ben Carlson provides an insightful review of the book, which argues that while technological innovation continues, physical progress has stagnated since the era of the Manhattan Project and Apollo program. The authors advocate for fostering more "innovation bubbles" to drive significant advancements.

• Silicon Valley's Role in Government Projects:
  The discussion shifts to Silicon Valley's increasing influence in government initiatives. Ben Carlson notes, "Silicon Valley has so much money in power now," highlighting the potential impact and challenges of tech giants entering governmental roles.

Notable Quotes:

• Ben Carlson at [08:42]: "We need to just let stuff happen and stop being so risk averse."
• Michael Batnick at [10:32]: "People are generally risk averse. It's so easy to win the electorate by scaring people."

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3. Market Efficiency and Leveraged ETFs

Discussion Highlights:

• Market Efficiency Debate:
  The hosts reference a conversation with Cliff Asness about market efficiency, particularly in the context of a Toronto blockchain company whose stock soared by 1,800% due to investor confusion. Michael Batnick emphasizes the challenges of exploiting market inefficiencies.

• Rise of Leveraged ETFs:
  Ben Carlson discusses the surge of leveraged ETFs, using examples like a "2x microstrategy ETF" with a 1.29% expense ratio, which has amassed nearly twice the Assets Under Management (AUM) of his firm. He highlights the appeal of such products to investors seeking amplified returns.

Notable Quotes:

• Michael Batnick at [07:29]: "That's common sense, but people consider it an outlandish take."
• Ben Carlson at [18:43]: "This stuff is here to stay."

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4. Economic Policies and Tariffs

Discussion Highlights:

• Trump's Proposed Tariffs:
  The hosts analyze former President Trump's proposal to impose a 25% tariff on imports from Mexico and Canada in response to immigration and drug issues. They observe that the market's muted reaction suggests confidence in Scott Bessant, the new Treasury Secretary, who has a Wall Street background.

• Historical Context:
  Michael Batnick references past tariff implementations during Trump's first term, noting that while inflation in tariff-impacted categories rose, core goods remained unaffected. This historical perspective provides a framework for assessing current policy impacts.

• Corporate Preparations:
  Companies are proactively stocking up on imported goods ahead of potential tariffs, mirroring strategies from previous administrations. The discussion includes the uncertainty surrounding the implementation and effectiveness of these tariffs.

Notable Quotes:

• Ben Carlson at [21:21]: "They think he's gonna rein him in or this is just a negotiating employee."
• Michael Batnick at [23:27]: "Last time it didn't, which is encouraging."

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5. Home Equity and Consumer Spending

Discussion Highlights:

• HELOC Utilization:
  The conversation shifts to the increasing use of Home Equity Lines of Credit (HELOCs) by homeowners to finance consumer spending. With home equity in the U.S. reaching $35 trillion, many are leveraging their property gains to support consumption.

• First-Time Home Buyers' Challenges:
  Michael Batnick and Ben Carlson discuss the declining percentage of first-time home buyers (from around 40% in previous decades to approximately 24%), attributing this decline to skyrocketing house prices and rising mortgage rates. They highlight the systemic disadvantages faced by new entrants into the real estate market.

• Impact on the Economy:
  The hosts ponder whether increased HELOC usage will provide a buffer in economic downturns or simply fuel continued consumer spending without addressing underlying inflation concerns.

Notable Quotes:

• Ben Carlson at [38:16]: "First time home buyers have gone from... and now it's at 20 below 25."
• Michael Batnick at [37:46]: "This is one of the biggest themes... we're continuing to spur the economy."

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6. Cryptocurrency Strategies

Discussion Highlights:

• Ben Carlson's Bitcoin Rebalancing:
  Ben shares his decision to sell 25% of his Bitcoin holdings upon reaching a price of $99, citing regret minimization and portfolio management as his primary motivations. He explains his approach to balancing his crypto exposure to mitigate potential drawdowns.

• Market Sentiment and Reactions:
  The hosts touch upon the polarized opinions surrounding cryptocurrency, with skeptics labeling it a scam and enthusiasts touting its potential. Ben mentions receiving both supportive and critical feedback from the crypto community following his transaction.

• MicroStrategy's Bitcoin Strategy:
  A detailed exploration of MicroStrategy's aggressive Bitcoin investment strategy is discussed. Michael Batnick describes it as "one of the greatest financial engineering schemes" and examines its potential risks and rewards.

Notable Quotes:

• Ben Carlson at [27:26]: "I'm practicing regret minimization."
• Michael Batnick at [32:50]: "It really is the greatest spectacle like I've ever seen in my career."

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7. Wealth Inequality

Discussion Highlights:

• Visible Wealth Disparities:
  Ben Carlson observes a shift in societal attitudes towards wealth inequality, noting that affluent individuals increasingly display their wealth openly. He cites examples from college sports recruiting, where monetary incentives are now prominently used to attract top talent.

• Impact of Capitalist Practices:
  The hosts reflect on the inherent inequalities fostered by capitalism, acknowledging its role in lifting many out of poverty while simultaneously exacerbating wealth disparities.

• Future Outlook:
  Ben expresses pessimism about the trajectory of wealth inequality, suggesting that without significant policy changes, disparities will continue to widen.

Notable Quotes:

• Ben Carlson at [44:32]: "Nike guy, Phil Knight basically told Oregon Open checkbook how much ever one you want."
• Michael Batnick at [45:19]: "Capitalism has lifted so much of the world out of poverty... And unfortunately, this is one of what comes along with it is wealth inequality."

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8. Travel Anecdotes and Personal Stories

Discussion Highlights:

• Vacationing in Punta Cana:
  Ben Carlson shares various experiences from his family vacation in Punta Cana, including humorous anecdotes about managing young children, enjoying amenities like lazy rivers, and observing local infrastructure challenges related to low property taxes.

• Cultural Observations:
  The hosts discuss the juxtaposition of wealth and happiness among local populations, noting that despite low median incomes, residents report minimal stress and high levels of happiness.

• Service Quality Comparisons:
  Ben contrasts the exceptional service quality in Caribbean resorts and establishments like Chick-fil-A with typical service experiences in the United States, praising the attentive and joyful demeanor of staff abroad.

Notable Quotes:

• Ben Carlson at [47:14]: "Everyone's always happy. The service is top notch."
• Michael Batnick at [53:43]: "The quality's not that great, but it's... It's fun enough entertainment."

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9. Sports Betting Trends

Discussion Highlights:

• Growth in New York and New Jersey:
  The hosts highlight a report indicating that New York and New Jersey are leading in sports betting revenues, with New York alone reaching $2.33 billion in wagers for the year.

• Potential Societal Impacts:
  Michael Batnick muses on the future implications of widespread sports betting, including potential regulatory challenges and the normalization of gambling behaviors across different demographics.

Notable Quotes:

• Michael Batnick at [54:15]: "A difficult element in tracking this economic cycle is that soft data..."
• Ben Carlson at [55:30]: "Maybe regulation comes back in a way, and the idea of regulation coming in sounds like laughable now, but is this going to eventually become a problem."

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10. Entertainment and Recommendations

Discussion Highlights:

• TV Shows and Movies:
  The hosts exchange thoughts on various entertainment offerings, including the Netflix show "Man on the Inside," the "Deadpool vs. Wolverine" movie, and Taylor Sheridan's series "Landman." They discuss personal preferences and audience reception, providing recommendations to listeners.

• Reading Habits:
  Michael Batnick shares his experience reading "Extra Life: A Short History of Living Longer" by Steven Johnson, while Ben Carlson contemplates creating a publishing company for concise, 100-page books to accommodate his busy schedule.

Notable Quotes:

• Ben Carlson at [56:53]: "I think for a book, you have to go all the way through."
• Michael Batnick at [61:44]: "The quality's not that great, but it's... It's fun enough entertainment."

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Conclusion

In this episode of Animal Spirits Podcast, Michael Batnick and Ben Carlson navigate a diverse array of topics, from the implications of heightened market concentration and innovative bubbles to the nuances of cryptocurrency strategies and the persistent challenge of wealth inequality. Their candid discussions on personal experiences during vacation add a relatable touch, while their analytical insights provide valuable perspectives for investors and enthusiasts alike. The episode underscores the complex interplay between market dynamics, economic policies, and societal trends, offering listeners a comprehensive overview of current financial landscapes.

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For more insights and detailed discussions, listeners are encouraged to tune into Animal Spirits Podcast every Wednesday morning.

Transcript

[Michael Batnick]

Since 2008, Global X ETFs have been committed to empowering investors with unexplored intelligence solutions. Global X specializes in exchange traded funds that offer exposure to the artificial intelligence ecosystem, including themes like data centers, robotics, semiconductors and cloud computing. To learn more about Global X's entire suite of ETFs from covered calls, fixed income, emerging markets and more, Visit Global X etf's.com.

[Ben Carlson]

Welcome to Animal Spirits, a show about markets, life investing. Join Michael Batnick 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 Batnick]

Welcome to Animal Spirits with Michael and Ben. Want to start the show by thanking all 1300 of you that filled out the survey. Thank you very much for doing so. A little, little bit surprised that our audience of financial professionals is smaller than I would have thought. However, I have a hunch, Ben, I have a hunch. What if the financial professionals are not doing their part? What if they're not filling out the survey because they said eh, we'll let the other people do that. If you're a financial professional and you are listening to the show and you would like to do us a solid or not, there's a link in the show. Notes please. We'd like to hear from you.

[Ben Carlson]

Listen, if we poisoned the well being an anti survey podcast, that's on us. That's not on us. You need to help us. No, that is on us by making well aid is on us. But you need to help us by putting in the right answers because we're not trying to lean you one way or another. We just want to know some general information.

[Michael Batnick]

All right, so Ben is coming to us live from. Are you in the Dominican Republic?

[Ben Carlson]

Yeah, Punta Cana, Dominican Republic.

[Michael Batnick]

All right. I'm not gonna say that I thought Punta Cana was Mexico. I'm not gonna say that I'm also not gonna ask. I'll ask. How are you an hour ahead? How is that even possible? I thought, I thought most places were behind.

[Ben Carlson]

Not gonna lie, I did not realize we were somehow passing some. I time travel to get here. I flew through Bermuda Triangle or something.

[Michael Batnick]

Alright, Given that I wasn't exactly sure where Puta Cana was, I joke, I might have known that it was a Dominican Republic who's to say? I kind of thought that was like due south of the east coast, but I guess it's. It's to the right of the map.

[Ben Carlson]

Well, it's. There's many beautiful places in the Caribbean. This is one of them. Great people. I have some travel thoughts. I don't. If you want to get into it right away or save it.

[Michael Batnick]

No, no, no. We could save it.

[Ben Carlson]

Okay. It's on the travel section.

[Michael Batnick]

All right, let's get into the stock market, shall we?

[Ben Carlson]

Okay, let's do it.

[Michael Batnick]

Okay. Where do you want to start?

[Ben Carlson]

You got to hear some stuff on. This is the top. Are you worried that things are getting toppy? Are you worried that people are worried that things are getting toppy?

[Michael Batnick]

No. In fact, what I had in there that I moved over to. What are your thoughts, Docker? All of the things that people said up to now had been the top. For example, the Nvidia watch party. That was like a 20% ago.

[Ben Carlson]

Oh, yes. Oh, you know, when. Or when the CEO signed the woman's bra or whatever. Chest. Yeah, that was going to be the top. Okay. Chart kid. Matt did an annual sector return format going back to 2014 total returns, and surprise, surprise, technology is at top. At the top, it's up almost 800% since 2014. The second place is consumer discretionary, up 271%. So technology obviously. Obviously dominating. Not surprising. I guess. This is pretty nuts from Bloomberg. So they looked at the California budget and they say that stock Pay at the four large tech companies accounted for 10% of the revenue in 2024 in the first half of the year for income tax withholding. That's Nvidia Alphabet. Dang it. I called it. That meant Google, Nvidia, Google, Facebook and Apple. The top 1% of California earners pay nearly half the state's personal income tax collections.

[Michael Batnick]

You know, Ben, I don't know that I've ever seen you in a hat. And also, you're breaking your rule. I believe it was you who said, if you're over 40, you can't wear a backwards hat. That was you? No.

[Ben Carlson]

Oh, that's definitely me. I said, once you become a dad, you can't wear backwards hat. Guess what? I'm a middle aged guy now and I'm going through a midlife crisis, so backwards hat. I just came from the beach, went for a nice walk on the beach this morning, and my son was jumping with joy because he was. There's been a lot of waves here and they've been red flags. We couldn't go in the ocean. Today was a yellow flag day. So he was psyched. So after this, I'm going to go get pounded by some waves.

[Michael Batnick]

You know, just back to the, back to the, this is the, the, the not top stuff. Let's just say that we are near some sort of top. I feel like the Jetson bra thing, the Nvidia, like how much time needs to pass, you know what I mean? Like, because if this is a top, even though it wasn't like the exact tippy tippy top, if, if after signs of the top we ran another 20% and then we fall 30% and we're looking, we're talking like five years in the future, we'll say, we'll still say that those are pretty good signs at the top though. So I feel like it's.

[Ben Carlson]

There's going to be something too early.

[Michael Batnick]

It's too early to be super dismissive is. Is all I'm saying.

[Ben Carlson]

Yes. And there have been a million things that have been said about anecdotes of okay, this is it and something is going to do it. But it's trying to guess which one it is is really difficult.

[Michael Batnick]

Now if we were to zoom out and take a look at and plot all of the signs of this is the top that people were saying this is the top of all the magazine stuff over the last 10 years, we'd have a long list of things, right?

[Ben Carlson]

Yes. Yes, you did a good job of doing this on. I guess yours was more risks. But yes, people have been calling for the top since I think 2013. Really.

[Michael Batnick]

All right, and here's, here's another potential wall of worry for us to climb. Well, actually this is not a wall of worry, but it's just potential reason to be concerned, not a wall of worry. Bank of America US stock market concentration hit record high in 2024. All right, so they're looking at the top 10 companies as a percentage of the total S&P 500 market cap. And in the, at the peak of the 2000 bubble, Microsoft, Cisco, GE, Intel, Exxon, Walmart, Oracle, IBM, Citigroup and Nokia were roughly 27%.

[Ben Carlson]

Who was the one who said that this is a bull market phenomenon? And then the bear market things because you can see in 2022 this reversed mobasin. Okay, so this reverse in 2022, no.

[Michael Batnick]

Business concentrations of futures of bull market. That's sort of be careful what you wish for. Nevertheless, I don't know that extreme concentration is a good thing. The top 10 stocks are now 36% Microsoft, Apple, Nvidia Alphabet, Amazon, Meta, Berkshire, Eli Lilly, JP Morgan and Broadcom.

[Ben Carlson]

Do you think they're really going to like make Google spin out Chrome? No, because that's, that's. They can't do that. Right?

[Michael Batnick]

I don't know enough to say can't, but I would, I would guess that they're not going to. Okay. So Nick at Jessica over at Data Trek tweeted, we lose no sleep over an S&P 500 that owns heavy doses of outstanding global companies as an index. It does something many active managers likely wish they could do. Take meaningfully large positions in superior companies and stay with them over the long term. And it's funny that this is like a courageous thing to say even though it's pretty common sensical, right? Because the knee jerk reaction, I think everybody's spidey senses sort of tingle when you see a chart like that. You think it has to be mean reverting, which it doesn't. So I think Nick and Jessica say something that is again seems like common sense, but that people would be like, well that's an outlandish take, or that's a contrarian take. I don't know why, why it should be.

[Ben Carlson]

Can you imagine being a large cap growth or a large cap fund manager right now? Anywhere in the large caps industry, I guess in the growth sector that would.

[Michael Batnick]

Be a large cap manager than a mid cap manager, small cap manager.

[Ben Carlson]

It's got to be so difficult to look at these percentages and go, okay, I'm going to play or I'm going to overweight them to try to outperform. It's got to be playing huge mind games of you at this point. Those big top six, 10, whatever it is. It's kind of funny that. So you show the names on your Berkshire Hathaway being one of them. They're a trillion dollar company now. It's funny to think that, oh well, this thing is passed Buffett by. He's kept right up kind of, he's. They're one of the trillion dollar companies.

[Michael Batnick]

Speaking of signs at the top, when Apple crossed a trillion dollars, I think that was 2017, but I'm not positive. That was very. People were screaming. Right.

[Ben Carlson]

It's another one of those things where the numbers just, they seem outlandish at first and then people get used to them and then it's kind of like, oh, okay, this is it, we have trillion dollar companies now. Yeah, all right. I did a little reading on the way down. I filled up my Kindle before I left and one of our readers actually or listeners emailed a couple weeks ago and said, hey, I got a new book for you. So I decided to check it out on the way on. It's called Bubbles in the End of Stagnation by Bernd Hobart and Tobias Hubert. Bern. Hobart has a substack that many of you might follow. What's it called? The Diff.

[Michael Batnick]

Yeah, I'm a subscriber.

[Ben Carlson]

Okay. And this is one of the better books that I've read in a while. I haven't read a good nonfiction book in quite some time. I pretty much just read all fiction these days. Cause I feel like nonfiction, I don't know, I just can't get into it. This was very good. And I'll say this not to pat myself on the back, but I think it's hard to do sometimes. Maybe I'm patting myself on the back to disagree with something in one of these takes, but also really agree with other parts. So the whole point of the book is. I'll read you this after the Manhattan Project in the Apollo program, whose major technological innovations, atomic bombs, nuclear energy, rockets and semiconductors were largely physical progress, became increasingly confined. Confined to the virtual. And their whole point is that it's kind of hard to believe. They say progress is stagnating while innovation is still going. So because I thought about this, why are they, why are they so down on innovation? And they're saying, listen, we haven't done anything physically. And they give this example where they say, listen, you can book a trip on the New York subway to fly from New York City to Tokyo and do it all on your phone. And that's great. But the physical infrastructure that you're riding on was built in 1970, and trying to build that same infrastructure today would be impossible. And so they're saying, yes, we've had. They saying progress has slowed, innovation has increased, and it's basically just the stagnation comes from. These breakthroughs have all been stuff in phones and technology. Stuff that maybe makes your life more convenient, but doesn't necessarily make us push forward and push the bounds. And so their whole point is we need to have more bubbles. And they say it in a good way. Like they, they say the Manhattan Project was a bubble.

[Michael Batnick]

What like to like attract capital or what exactly.

[Ben Carlson]

To attract capital and ideas and kind of just let things happen. And their whole, their whole point is kind of just, we need to just let stuff happen and stop being so risk averse with all this stuff and stop worrying so much about what technology can do. And just let things go, which is interesting.

[Michael Batnick]

You know what this is? This is where politics comes into it, because I think people are generally risk. Risk averse. And it's so easy to win the electorate by sort of scaring people and saying, like, we can't do this.

[Ben Carlson]

Okay, so. So I listened to a podcast with Ben Thompson. He interviewed Bern Hobart about this book, and at the end they talked about politics. And I didn't really put this together. And I listened to a podcast with Brad Gerstner, too, and he talked about this. And I never really put this together during the election, but now it makes so much sense. The Silicon Valley crowd doesn't think that Trump won the election. They think they won the election. Like Elon Musk is their surrogate cause. Look at this. So. And they talk about the fact that they just want to let things run and they want to have.

[Michael Batnick]

Not entirely untrue. I mean, it's a reasonable.

[Ben Carlson]

No, it is.

[Michael Batnick]

Did they not push him over the edge or help to at least?

[Ben Carlson]

Oh, I mean, the richest man in the world spent a lot of money, so it certainly makes. So the Washington Post has a story saying that Mark Andreessen and Joe Lonsdale, he's the guy from Palantir, and Travis Kalanick are going to be on this DOGE thing to try to make things more efficient in the government. And I guess who's going to be.

[Michael Batnick]

On the Sheba project?

[Ben Carlson]

But this was bound to happen, I guess Silicon Valley has so much money in power now. They're not these little upstarts anymore. They have a ton of power. So it's kind of like, I guess this was bound to happen at some point. Will they like the results? Will they like having less red tape is what they want. And they just want to do stuff and not have the government get in the way. I think that was their whole problem. And that kind of comes back to this booms and busts thing. So I think it's going to be interesting to see as an experiment, do they get into the government? Sort of periphery get into the government, I don't know, the books or whatever, however the government works and realize, like, we can actually make some meaningful change here. Or do they look at it and they go. Or do they get in there and they go, oh, my gosh, I can see people been trying to fix this stuff for years and it's impossible at this point. So I. It's interesting, but. But my whole point is I think they see this election as kind of like, listen, this is our turn Just get out of our way. Whoever. Whatever party we're affiliated with, we just want them to get out of our way and let us do stuff. So I think it'll be interesting to see if they can do stuff now, like actually build stuff and not just make apps for us.

[Michael Batnick]

I think regardless of your political affiliation, we should all be rooting for this experiment to work. Obviously.

[Ben Carlson]

Yes. But I can't believe I kind of missed that. Like, oh, the tech people. It's not like, for them, it's not Republican or it's not Trump. It's get out of our way. Let us tinker and do stuff.

[Michael Batnick]

Yeah. All right. Well, yeah, no, you're right. It's going to be very interesting to see how they do.

[Ben Carlson]

Yes. If they can actually do it. Okay. I feel like this happens. You and Josh had a great conversation with Cliff Asness. I snuck away to the gym the other night at the gym at the resort. Not to brag. Nice little gym here. And I put on my headphones and I listened to you and Josh and Cliff Asness. And you talked about market efficiency. And I thought that was a really interesting conversation for people outside of the industry. It might seem like splitting hairs, but I think it's an important conversation. But there was this news saying that investors confusing Blue sky with a Toronto blockchain company send the stock soaring 1,800%, which is kind of funny that the fact that it's a crypto stock didn't do it. It was being affiliated with a new social media company. And the firm even said, like, listen, we're unaware of anything that happened here that. That caused anything for our company to do better. It's just people. It's a market efficiency thing. Right. But what was Cliff's point? Like, okay, fine. You say the market is inefficient because these stupid stories happen. Fine. Create a fund or a strategy and make money off of it. Which is impossible, obviously.

[Michael Batnick]

Yeah, which.

[Ben Carlson]

Which was a good point. So this is from the ft. They show that Blue sky users have now overtaken threads. And that happened in a hurry. And I. I'm starting. So it's daily active users are closing in on 3 million threads. Never really felt real to me. We talked a little about Blue sky last night. I feel like it might have legs. I don't think you're quite there yet. Are you on the platform or not?

[Michael Batnick]

I. I just sent my first. What are we calling it?

[Ben Carlson]

Sky. I don't know if it has a word.

[Michael Batnick]

Blue sky post. I did a meme. I did I did my Michael Sailor meme. Did. Did you see the. You know when. When Otto Octavius is, like, trying to control the sun and the. The. The thing with his arms. Remember The Spider Man 2?

[Ben Carlson]

Oh, okay. Gotcha. And that's the Michael Saylor.

[Michael Batnick]

So I said Michael. I was gonna say I tweeted. I wrote Michael Saylor and Michael Strategies market cap hits $47 trillion. And the caption is, otto says it will stabilize. It's under control.

[Ben Carlson]

Okay. You said that to me and Josh. That was like you were trending on Slack first. Yeah, that was pretty good. So I think the best part about.

[Michael Batnick]

It is, anyway, there's zero response. Zero. Likes. Zero.

[Ben Carlson]

It'll take a minute.

[Michael Batnick]

It's a wig and a miss.

[Ben Carlson]

It takes a little bit. But here's the thing. You're starting from ground zero in terms of followers and such, and I know there's some people who will migrate over from Twitter, but it's actually kind of refreshing to start over and build your way back up. I mean, it is kind of annoying that you already built a following somewhere else and I got to try to do it again. But here's the best part. For me, it feels like there's a lack of perma bears and psychos so far. I know they'll come if this thing gets big enough.

[Michael Batnick]

Yeah, give it a minute.

[Ben Carlson]

But it does feel fresh, and I think it has legs. I think there's. Especially in terms of the finance people that we follow, unfortunately. I think we're going to be dual screening it for a while. We'll see if it actually. If it actually keeps going. I don't know.

[Michael Batnick]

It does seem, for whatever reason this is taking. Taking up, but I, When I signed on, it's. And I asked you, what are your interests? And it shows a bunch of different bubbles with software development, education, food, journalism, whatever. You know, it's not their finance. There's no business things, which is odd.

[Ben Carlson]

You say degenerate movies.

[Michael Batnick]

So, yeah, I was on. I know it's lame to complain about Twitter, but. So I'll move off this quick, but like, I hit the for you tab just to, like, see what was up. And the first thing was a threat of all different angles of. Of the planes going to the World Trade Center. And so I'm just scrolling for doom. Scrolling for 30 minutes. And I like, through my phone, I, like, snapped out. I'm like, whoa, what in the. So I have little interest in, like, tweeting again. But it is cool to see an alternative. To see.

[Ben Carlson]

I'm Not. I'm. Some people were saying, oh, look at Ben's. Ben can't handle being on Twitter anymore. I'm not leaving Twitter. I'm still there. I'm still tweeting. Come on. People having an alternative is kind of nice. And I guess the one thing people are saying is, listen, there's no algorithm on this thing. It is just a feed, and you can follow your feed and there's nothing that's gonna be force fed to you. There's nothing that's gonna be like. People are saying if you post a link on Twitter, it doesn't work anymore. It gets pushed down. He doesn't want people leaving the site. And Bluesky doesn't have that.

[Michael Batnick]

Yeah, okay. Yeah, no, that is so. That is nice.

[Ben Carlson]

We'll see.

[Michael Batnick]

So. All right. I. You know what? I'm not making any predictions as to how I will use Blue Sky. We'll see, we'll see, we'll see, we'll see. All right. Todd Son has a chart that is a face blower. It's a single stock levered ETF volume. And he said, boy, that escalated quickly. I mean, that really got out fast. And he's quoting the great Ronald Burgundy.

[Ben Carlson]

I don't have the tweet in front of me, but Corey, our friend Corey Hofstein made a tweet last week making the astute point that there was a lot of these ETF companies that came out and said, we're going to do this kind of investing. We're going to do dividends or quality or something like this. And he said, so many of these places have just transitioned into two times this company or one times that company. And they brought in a ton of money. And how can you blame them if this is what people want?

[Michael Batnick]

Yeah, no, there. It's. These are. I don't blame. I don't. And credit to Corey. I don't think he was blaming them either. Like, this is capitalism. This is what we're here for. I. I had this in the doc, actually, with Cliff, but I. I didn't get to. I didn't get to it. Corey tweeted, depression is seeing that a 2x microstrategy ETF with a 1.29 expense ratio has nearly twice the AUM of my firm. All right, let's talk about the economy for a second.

[Ben Carlson]

So wait, wait, wait. Does. Is this just life now or is this. Is this a flash in the pan kind of thing? This seems to me like this stuff is. Every time there's a new hot stock, it's going to get more month flows in terms of the double and triple leverage stuff, right?

[Michael Batnick]

Yeah, no, I think this is here to stay. I don't know that it's going to be microstrategy forever. In fact, it's almost certainly not. But whatever the hot stock is, yeah, this is how it works.

[Ben Carlson]

So the strange thing about this whole market environment, it's been this whole decade it feels like, is you have tons of money still going into index funds. Right. Eric Balchunas always tweets about how VOO is like the king now he's taking in all this money that's AN S&P 500 index fund. You also have all this money that's trading meme stocks and trading double levered this and crypto. And there's 7 trillion in money markets. It's just, it's not like people are really picking one area of the market and this is it. It's, there's stuff going on everywhere.

[Michael Batnick]

All right, so the question I keep asking is where is all this money coming from? I just, I continue to not really understand, I don't know, can't all be, it can't all be coming from active mutual funds. You know what I mean? Like they can't, that can't be the source of all the capital. All right, so, so Don Trump put a message out last night onto Truth Social. I think it gets recycled on Twitter and let me just read it. He said, as everyone is aware, thousands of people are pouring through Mexico and Canada bringing crime and drugs at levels never seen before. Right now, a caravan coming from Mexico composed of thousands of people seems to be unstoppable in its quest to come through our currently open border. On January 20, as one of my many first executive orders, I will sign all necessary documents to charge Mexico and Canada a 25% tariff on all products coming into the United States and its ridiculous open borders. This tariff will remain in effect until such time as drugs, in particular fentanyl and all the legal aliens stop this invasion of our country. Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem. We hereby demand that they use this power. And until such time that they do, it is time for them to pay a very big price. And interestingly, the market didn't really react to this like this was after hours. You would have expect to see big moves in the dollar, big moves in maybe interest rates in international currencies.

[Ben Carlson]

Well, the dollar took off a little.

[Michael Batnick]

Bit, a little bit, but eww. Which is the Mexico ETF stock, it's down less than 2% today, which is, you know, all things considered, what a big trading partner they are. It's not, it's not a whole lot.

[Ben Carlson]

Do you think Canada's up there going, what did we do? Eh? Come on, we're done. We didn't do anything. Do you think Wall street is hearing what it wants to hear on these policies, though? Because it feels like people on Wall street and finance are pretty happy with his selections for the finance positions. So I'm. So they're pretty. They think he's gonna rein him in or this is just a negotiating employee. Do you think people are just hearing what they want to hear and assuming. Well, he's using this as a negotiating employee. Take him.

[Michael Batnick]

Yeah, well, that's not.

[Ben Carlson]

Seriously. Or whatever it is.

[Michael Batnick]

We're speculating.

[Ben Carlson]

Yeah. But the market speculation seems to be like, it's not a big deal.

[Michael Batnick]

Well, but Trudeau said that he was, that there was. Somebody tweeted that they were going to speak. The, the leader of Mexico already reached out. So I don't know if this is going to go into effect or whatever. The market seems to not be concerned. But, Ben, you mentioned that Wall street is happy with Scott Bessant, the, the, the new incoming Treasury Secretary. And for those of you who don't know who that is, he was, he's, he's a longtime Wall street guy, was a chief investment officer at Soros, raised, started at the time, was the largest Macro hedge fund in the world. If you're interested in learning more, our friend Ted Seides did an interview with him. Mike Green had a really good conversation with him recently. And he seems to be, by all accounts, and I've only discovered this man, you know, in the last week or two. This is not something that was on my radar, but he seems to be incredibly reasonable. And I feel, again, the little that I've seen of him, I feel very, very happy that there's like a sober, rational person who's going to be effectively the Chief Financial Officer of the United States. It's pretty important job.

[Ben Carlson]

And maybe that's why Wall street is not that concerned. But who knows? I guess we shall see.

[Michael Batnick]

We shall see. But I was, I was, I was very happy with that.

[Ben Carlson]

So is this going to be, I was thinking this tariff things, but companies have to plan for this. Right. And people are saying if he does these, that, like, if he does that immediately, you know, because the US Automotive industry gets so much from Mexico in terms of supply chain like that decimates the auto industry. So this can be like the recession where people try to get ahead of this.

[Michael Batnick]

So Sam, Sam tweeted a chart from Goldman and it shows. So this is Trump enacted tariffs in his, in his first term and there's a chart showing the PC for prices across nine tariff impacted categories and the PC for all other core goods. And when Trump implemented his tariffs, the inflation for the tariff impacted categories did go up quite a bit, but it had no impact on all of the core goods. It's not to say that it won't this time, like maybe it will, maybe won't. But the point is, last time it didn't, which is encouraging, right?

[Ben Carlson]

It just depends, are they bigger this time? So this is from the Wall Street Journal. American businesses are dusting off a playbook they use during Trump's first term, stocking up on imported goods before tariffs are enacted. They're also considering how to cope with the levels if and when enacted. So they're trying to get ahead of this. Do you think that that makes it kind of almost like the member companies kind of got all like in a fetal position, like planning for a recession in 2022 that never happened? Is this going to be a situation like that where they plan and they pull us all forward and then if it doesn't happen, okay, now what do we do? Does that. So is, are there waves and waves of impacts of this as people try to figure out what is actually going to happen?

[Michael Batnick]

I think we'll say I always defer to the market. So I think on the one hand I take a little bit of comfort in the fact that the market did not freak out over this. On the other hand, we'll say it's two months away. Right. So we shall see how this plays out.

[Ben Carlson]

So the thing that we've hearing for three years now is, listen, it's not the inflation rate jerks economists, it's the level of prices. So even if you get a one time up in prices, how are people going to feel about that? CBS News had this poll about Trump's transition. They asked people like 50 different questions about how do you feel about stuff? And they asked him what their highest priority was. And they talked about deporting immigrants and cutting taxes and tariffs and DEI stuff. And all this stuff that people have said is that Ukraine in the US and the number one highest priority was we want lower prices of goods and services. Right? Right. They don't just want inflation to fall, they want lower prices. This is what people say that 80% of people said this is A high priority. There was not even another one close to there to even tax cuts. This was higher than that. Are we ever as a nation going to understand how inflation actually works? Because I don't think we are collectively.

[Michael Batnick]

I mean. But that's okay. I mean, how would everybody be an expert on. On price levels? You know what I mean?

[Ben Carlson]

Yes, I, I think that this is just a lost cause though, of explaining like actually.

[Michael Batnick]

Because, because, because what. What you're saying is, listen, for prices to fall, the, the economy will need to be in a bad place and you actually don't want that. But guess what? I think some people do because Josh made this point very.

[Ben Carlson]

No, but they're not going to. People aren't going to take a 20% haircut and pay to have lower prices. No, no, no, no, no.

[Michael Batnick]

But they don't necessarily have to. Like, unemployment can go to 6% and prices could fall. And I think the 94% would say that. 6%.

[Ben Carlson]

No, no, no. Even in the 2009 crisis prices, we had deflation for a blip. It was not. There was not a mass fall of prices. It was. Prices kind of slowed, but so did. So it wages.

[Michael Batnick]

It's. It's possible that, that some category prices fall. I don't think it's impossible.

[Ben Carlson]

Sure, JCPenney could have a 50% off sale, but that doesn't mean that. But I'm saying if you want a full scale. Yeah, we're going back to 2019 prices. You need wages to fall. There's no other way to do it.

[Michael Batnick]

Yeah, I would agree.

[Ben Carlson]

Okay.

[Michael Batnick]

All right, let's talk about crypto for a little bit. Which is everybody's favorite category around here, you know.

[Ben Carlson]

Well, it's both sides. This is the market. Some people say, listen, keep talking about crypto, guys. I think it's interesting.

[Michael Batnick]

Not. Not really.

[Ben Carlson]

Yeah, I got a few of those emails.

[Michael Batnick]

Okay. I, I'm seeing the people that really, that think it's all a scam and tulips are like, guys, enough with the crypto. And by the way, the guy that said to me in the airport, I'm not having it. We had a lot of people say, he was saying, I'm not having it.

[Ben Carlson]

Halving.

[Michael Batnick]

There's no way. There's no way.

[Ben Carlson]

About 100 people made that joke, which was a pretty, pretty decent joke, but he would have had to give you a wink if he did that.

[Michael Batnick]

Yeah, we walked away awkwardly.

[Ben Carlson]

I think people were trying to be funny when they said that.

[Michael Batnick]

But no, no, I think, I think people were earnest in the email, there was, there was none of that. He was, he was, he was sincere. We walked away awkwardly. There was no smile. And if he did come up with that, it would have been like the quickest joke ever, right? Because he wasn't planning to see me in the airport. So anyway. But.

[Ben Carlson]

So I'm also not a funny joke.

[Michael Batnick]

So. So I'm here. So. So people that don't like us talking about. Because I think it's a scam. And then like the real bitcoin, people who are like, you guys are such idiots. You don't understand it. You don't get it. You're missing it. All right, well, great. So anyway, that's true. We'll keep this brief and madhood.

[Ben Carlson]

No, I have some.

[Michael Batnick]

You know, how about this? We're not gonna keep it brief. This might.

[Ben Carlson]

I want to talk about this because I've gotten some ton of feedback. So I. I've been talking to you for a while. I think on last week's show. I said, when it hits 100, I'm selling. And finally it got to 99 and change. And I thought, I just, I gotta do it. I pulled the trigger and I sold 25% of my Bitcoin position. And I just did it. And I put another limit order in to sell. And I didn't wanna do it right at 100. Cause I knew if it hit 100, something weird could happen and a bunch of other people would sell. So I did it at 99. I SOL. Sold some. I gotta say, it felt kind of good. Like it felt like a weight lifted off my shoulder. I've got a. And I said the reasons I'm doing it, I'm rebalancing. It's a. It's a way bigger position. It's almost 10% of my portfolio. It's bigger than I ever thought possible. You get huge drawdowns in bitcoin. And I said, I'm practicing regret minimization. And I'm doing the Grand Rapids hedge. Right.

[Michael Batnick]

Somebody said, somebody emailed us. What is Ben go do about the taxes? And I. I assume you're just going to pay them.

[Ben Carlson]

Yeah, no, you don't have to pay taxes on crypto. I heard once January 20th happens, there's no tax on crypto. I am still holding on some eth. I think I had pretty much the market weight of 80, 20 or so. So I'm swinging on that because that didn't really catch up as much. But I think on my cost basis I was up six times or something on bitcoin. And I just, I couldn't. So I'm rebalancing and I'm using it as an as in a constructive portfolio management way. And if it crashes again, I'll buy more, probably, and I'll rebalance back into the pain. And I had a bunch of crypto people kind of say, people were writing, there was blog post written about it and people were commenting. And I had a lot of crypto people say, you know what, this is a very reasoned argument. I appreciate that. You're still an idiot.

[Michael Batnick]

Overruled.

[Ben Carlson]

So I kind of appreciate they're like, you know, the government's going to make it a reserve currency and it's going to go to 400. And guess what? That's why I only sold half or a quarter. I'm going to sell another quarter if it goes up. So that's why it did that, because I didn't want to look like an idiot either way. So, yeah, so that's why I spread my bets. And I always say investing itself is a form of regret minimization. You have to take a risk one way or another. If you're all cash, that's a risk. If you're all stocks, that's a risk. If you're hedges, that's a risk. The famous Bogle quote was, he has 50%. He had 50% of his portfolio in stocks, 50% in bonds. And he said, when stocks are doing really well, I wish I had more in stocks. When bonds are doing well, I wish I had more in bonds.

[Michael Batnick]

Yeah.

[Ben Carlson]

So that's the whole point of it. And so that's why I did it. And credit to you, I'm happy with the decision. I'm at peace until it goes to 150, then I'm going to be pissed.

[Michael Batnick]

Well, listen, being at peace is a good place to be. It's the only place to be when you're investing, especially something as volatile as crypto. Matt Hogan tweeted, 95% of the world's largest investors have zero exposure to Bitcoin, but 95% of all Bitcoin is already owned. Well said. So for me, for me, that's always, that's always been the, that's always been the driver. It's the supply demand, the supply demand imbalance.

[Ben Carlson]

Here's an Econ 101 guy.

[Michael Batnick]

Pretty simple. It's not, it's not to say that prices can't go down or crash. They, they can and they and they will at some point. All right, the, the, the Michael Saylor stuff, the microstrategy stuff.

[Ben Carlson]

Look at this chart. It's the most ridiculous stock chart in history.

[Michael Batnick]

It's wild. So. So for those who are unfamiliar with the story, I know we. We went over it, but it's so crazy. MicroStrategy last week was the number one most heavily traded security in the United States, ahead of Tesla and Nvidia and Double Spy. And in front of everything. Okay, MicroStrategy is a software company that loses money. It's not really a software company. It's a bitcoin treasury company. That's. That's how they describe it. And I watched. So you see, like, clips of Michael Saylor on. On cnbc, and he says a lot of crazy shit and things that really make no sense at all, like, really and truly. But I watched a longer video that Corey Hofstein posted, and the first 25 minutes, he did it. Michael Saylor did a really good job laying out exactly what he's doing in a way that you might think it's. It's. It's crazy, but it's a. It's the. One of the greatest financial engineering schemes in the history of Wall Street. Like, hard. Stop. And I wrote a post about this and I said, somebody said, oh, he won the lottery. This and that. No, I mean, yeah, he did, but he called his shot.

[Ben Carlson]

He's been laying this out for years, right?

[Michael Batnick]

Yeah, he called his shot and then he smacked a grand slam. This wasn't like, a mistake. So anyway, what he's doing is.

[Ben Carlson]

You wrote a blog post about this and you said this is for normies to understand, like, what he's actually doing.

[Michael Batnick]

Yeah. So I tried to explain it that way. So he's issuing convertible debt at effectively different. Different interest rates, but, like, close to zero. Right. So he's getting free money and he's immediately buying Bitcoin. And it worked, right? This, the price. MicroStrategy went up, Bitcoin went up. The convertible bondholders converted into equity, they made money, and then they did it again, and then they did it again, and they did it again and again and again, and they keep doing it, and it's spinning really quickly. And the way that he described the strategy with, with the options market and the liquidity and like, it's. It's compelling and it worked. And now the question is, when? How does this end? Does it end today? Does it end at a much crazier number? Because what did I say? If it keeps going at this pace, by next year, it'll be the biggest company in the world. So it's an. It was.

[Ben Carlson]

It hit 90 billion dollar.

[Michael Batnick]

It hit 115 billion dollar market cap which is bigger than Starbucks and Nike and all these other monster companies. So you might say this is the craziest ever. This is going to end so badly and you might be right. But it also could get a lot dumber or it could end today, who knows? But the point is it's wild. It really is the greatest spectacle like I've ever seen in my career.

[Ben Carlson]

I have two things. I don't know if I'd say that because there's been some crazy stuff that's.

[Michael Batnick]

Happened but wait, hold on. What's crazier than this?

[Ben Carlson]

I don't know. Oil going negative. I don't know. There's so much crazy stuff that's happened last four years, it's hard to pick. I'd have to think through my favorite movie. I can't do it right off the spot.

[Michael Batnick]

To me, this is the number one.

[Ben Carlson]

Okay, so I have two things. One, this feels a little bit like Tesla in that. Remember all the people shorting Tesla were saying he's never going to raise enough money. And every time Musk was able to raise money and raise equity and that kept Tesla going even though people thought it was going to fail. Number two, here's what I think makes obviously people say, well, if bitcoin crashes, this thing's going down. Of course, because it did already. Wasn't it down 90% during the last crash? So here's the thing that I think makes it not end badly but just end is. And Josh talked about this a little bit, but I have a further take. So it's other companies starting to do this. And here's the. Remember how Berkshire used to have a premium on book value? So the underlying holdings of Berkshire people would pay like one and a half or two times for them. So right now people are paying three to four times the value of Bitcoin for MicroStrategy. It's just if other companies start doing this and they don't have as big of a premium, investors are going to say why would I want to own MicroStrategy in their levered bitcoin play when I could get this other levered bitcoin play and we're not paying a bigger premium. So if other people started doing this, their premium will just shrink and their premium goes from three or four to one to two. Yeah, that's what makes it stop going up forever. So it's a faith based thing.

[Michael Batnick]

Yeah, that's not a bad take anyway. So, so a lot of the people that are investors microstrategy get upset when normies like us like sort of are condescending or mock them. And I'm not trying to do that for the record. I think that there's a lot of really sophisticated investors on Reddit boards that understood exactly what Saylor was doing and made ass loads of money. And to those people, I earnestly say congratulations to the people that are fomoing now fomoing in who don't really understand what's going on. I'm talking to you. Just be careful. So for example, and then there's a good article in Bloomberg about like the market makers and the people that are supplying the swaps and the leverage to the like literally they're double levered microstrategy instruments, which is a whole other interesting chapter in the story. So there was an article in the Wall Street Journal covering it and they highlighted Chase Fury, a 25 year old trader in Newport Beach, California. He started buying bitcoin related stocks, hoped to surge his harvest gains. He moved about. He moved all of his investments worth about $112,000 into the Defiance ETF and has grown his portfolio to about $400,000. The Harvard graduate. The Harvard graduate. Okay, so to the point of. No, don't laugh this.

[Ben Carlson]

It's funny to think about it this way though because he probably learned all these different discounted cash flow methods and he's YOLOing.

[Michael Batnick]

Yeah, but credit, credit to this kid because obviously he's incredibly intelligent and he saw what was happening and he made a lot of money. But not. But his parents. He convinced his parents to let him manage $700,000 of their retirement assets. I'm guessing they were well off, but who knows? Who knows if that was like 100 the portfolio or 10%. He said he came up with a less dangerous and smarter plan for them. He invested 27% of their portfolio, the Defiance ETF and the rest of MicroStrategy.

[Ben Carlson]

The money's more than on board with that. I think that's a dumb idea. I mean for your retirement strategy.

[Michael Batnick]

Agreed, agreed.

[Ben Carlson]

Agreed.

[Michael Batnick]

For your.

[Ben Carlson]

If you're looking at the outcome, sure, they're great. But that, that.

[Michael Batnick]

Anyway. Anyway. Anyway. Does this, does this end badly today? Does MicroStrategy double from here? There's no outcome that would surprise me.

[Ben Carlson]

But this is why bitcoin is up a lot, obviously. And even that is not enough for people. This is why bubbles will always be part of. It's a permanent part of the process. People are never Satisfied with just saying, hey, there's big gains, I need, I need bigger gains. And this is why this stuff will always, always happen.

[Michael Batnick]

Yep, yep, yep.

[Ben Carlson]

Okay. The Wall Street Journal has a piece about America's piggy banks which we've been talking about for a while here, hitting up the home equity lines of credit. We don't have the crypto before I move on. Yep, that was it. Okay. I think we gave it ample time. We're going to have to do a like a stopwatch I think to figure so we don't go over. We need a shot clock on it so people don't get mad. So they show the home. The value of home equity in the country is $35 trillion. And then they show the first time home buyers and they're calling it's a piggy bank and just saying that it's unfair because first time home buyers have gone from, call it 40ish percent in the 80s and 90s and 2000s. It's slowly gone down from there and now it's at 20 below 25. I think it's 24%. And basically just saying like so I think the only people who, I mean obviously they're still first time home buyers happening and maybe they're getting help or maybe they're just the people who are well off and can afford it. But it's just that the people who have money in their home are the few people who are able to transact in the real estate market because they have that equity to play with. Right. It's house money. It's free money. They can roll it over and use it as a down payment. Those are the people that will be spending more when mortgage rates fall, not first time home buyers.

[Michael Batnick]

I agree that yeah, one of the biggest themes of the last, I don't know, two, three years are first time home buyers just getting absolutely railroaded.

[Ben Carlson]

Yes, yes. And I've said for years now of any group that got screwed the Most during this 2000s period, it's first time home buyers. Yeah, they just got unlucky and bad timing. Nothing they did on their part could have foreseen this happening. House prices going up so much and mortgage rates going up. Totally screwed.

[Michael Batnick]

Torsten Slack in his daily letter wrote, as home prices continue to rise, more and more households are taking out helocs to finance consumer spending. In other words, homeowners are liquefying their home price gains and using the proceeds for consumption. Combined with low jobless claims, strong wage growth, high stock prices and solid cash flows from fixed income including private credit. The US Consumer continues to do well. And Ben, you've been, you've been talking about this for a while. This is, I don't know if this is going to, like, you know, put a floor into the next recession or if it's going to just continue to spur the economy, but people are tapping their, their home and why wouldn't they?

[Ben Carlson]

It's going to, yeah, it's going to accelerate if mortgage rates ever fall. The Washington Post had a piece actually saying this is the biggest problem for Trump's economy right now. 7% mortgage rates. And how do you, how do you fix that? And I don't see. There's none that I can see any policies that he can do, they're going to fix the mortgage rate market because he wants growth to pick up and.

[Michael Batnick]

He wants, what if we stop buying mortgage bonds again? I mean, that's a solution.

[Ben Carlson]

That's the only, that's what I've been saying for a while, to narrow that spread. But I don't know if people are going to be on board of that.

[Michael Batnick]

What people?

[Ben Carlson]

I don't know. Economists, People who make financial decisions.

[Michael Batnick]

Yeah.

[Ben Carlson]

All right, email question. Just one, because we talked about this last week, wondering if you could, you could elaborate why it's a bad strategy to pay off or accelerate payments on a 3% mortgage. For me, I just don't want to be making payments for the next 25 to 30 years. Would rather get out of the mortgage and have a possibility to make income on it through rent one day. Thoughts?

[Michael Batnick]

Okay.

[Ben Carlson]

I just think it's, it's the, it's one of the biggest financial assets you have because after inflation and the interest expense that you can write off for your taxes, you're effectively borrowing at 0% in a 7% world. I don't know why you would ever want to give that up when the hurdle rate is that low.

[Michael Batnick]

It's not math.

[Ben Carlson]

Yeah, I say that. I think it's, it's not math on a 6% mortgage. And a 3% mortgage is math. How's that?

[Michael Batnick]

I know, I agree with you, but like, for people like this, like, you're not going to convince them with numbers. Right. Because this person is saying, I just don't want to be making payments in the next 25 to 30 years. It's not a numbers thing.

[Ben Carlson]

Yeah. And I still don't get, and I still, it still doesn't make sense to me. And I get where he's coming from, and I still don't get it.

[Michael Batnick]

I'm with you and this is okay. People can disagree because this is like a personal. This is a personal decision.

[Ben Carlson]

Yes, but he still shouldn't do it.

[Michael Batnick]

I agree.

[Ben Carlson]

All right.

[Michael Batnick]

Survey of the week except for hours like and subscribe from Matthew Miskin. He tweeted. A difficult element in tracking this economic cycle is that soft data, which is surveys has been weaker than the hard data. Love this chart from NFIB showing the conversion starting business consumer surveys likely to be more indicative of real growth. So again, another huge theme of not just this show but economics talk in general for the last couple of years has been the disconnect between the hard surface and the soft surveys. Meaning like how is the economy doing? How do people feel? It's doing okay. And the good news is that the soft how people feel it started to converge.

[Ben Carlson]

Wouldn't it be funny if this happens right as the hard stuff is starting to roll over like the sentiment comes back and then the actual numbers go down.

[Michael Batnick]

That would be funny. So. So this, this isn't just a Trump thing. This, this bottom a couple of years ago. Although it certainly it seems to be kicking to over here now. Which I. To. To which I say wonderful because if people feel better about the way that the economy is going, then the vibes will improve. Right. That's feelings. And hopefully they will start to spend more and feel more comfortable at making investments. This should be good for growth.

[Ben Carlson]

Yeah. But the funny thing is this should.

[Michael Batnick]

Be good for the economy.

[Ben Carlson]

Spent a ton of money when the vibes were down, so I don't know if it matters.

[Michael Batnick]

True, true, true. We'll see.

[Ben Carlson]

But I think the vibes and the vibes have been totally disconnected from spending for a long time now. And I don't know if that ever.

[Michael Batnick]

Okay, that's not. That's not. You're not wrong. But I, I would love. I think it's good to see people feeling better.

[Ben Carlson]

All right. So you know the Tom Hardy gift from if you're what's a Fury also movie Mad Max where he goes that's bait.

[Michael Batnick]

Yep.

[Ben Carlson]

This is from Axios salaries. Americans say they consider the minimum to be for the next success. Successful boomers. It's 100k gen X.

[Michael Batnick]

You know what? Show me the survey questions. Show me the source. I don't believe this.

[Ben Carlson]

I don't either. So gen X has 200 something. Millennials say 180. Gen Z says $587,000 to be happy. The average is like 270. Obviously gen Z pulls it up. This is an engagement bait survey to get People mad on the Internet. There's no way this is real. No way. Because a lot of people are saying, oh, see Gen Z, they're so coddled and they, they're disconnected from reality and there's no way this is a real survey that they think they need $600,000 to be happy and boomers think they need a hundred.

[Michael Batnick]

Thank you, Ben. You're saying the truth. It's a fake survey, people. I can't prove it because I didn't see the survey, but I know it's true. I know it's fake and you know it's fake. I had a friend sent this to me. Yeah, this is fake. This is fake news. It's bullshit. There's no way. There's no way. Nice try. Not buying it.

[Ben Carlson]

All right, so I have a take here. I think we got a minor reprieve from income inequality and wealth inequality in the 2000 and 20s because the pandemic, but that was an outlier event and it's a one off. And I think inequality is just going to explode and get worse from here because I think the attitude towards inequality has changed. I think it's always been the case that money can buy everything by anything. But it used to happen behind the scenes. Now it's in your face, out in the open. So here's an example. I'm a Michigan football fan, it sounds to me. So Michigan just, I don't know if you don't pay attention to this because you're New York and people in New York City don't pay attention to college sports, right? So the number one football recruit in the country is a quarterback who plays in Belleville, Michigan, which is right down the street from Ann Arbor, where Michigan is. So Michigan should have had this guy, but LSU signed him and then they had this nil money, right, where you can pay college football players now or college athletes. And Michigan didn't do much of that before. And finally they went to their rich donors and said, listen, all the other teams are paying a bunch of money. Ohio State went out and paid $20 million to get a roster last year. We need some money. And Dave Portnoy said, I'm going to give 3 million bucks to get a quarterback. And little did I know, Larry Ellison's fifth wife went to Michigan. And Larry Ellison came off the top rope with I don't know how much money to give this kid, but it's a ton of money. And Michigan flipped the number one recruit in the country to be their quarterback.

[Michael Batnick]

Oh, that's awesome.

[Ben Carlson]

And so for me, I'm thrilled. If I was a fan of the team that we took him from, I would be so disheartened. And this is going to happen. So my point is true. So Nike has the, the Nike guy, Phil Knight basically told Oregon Open checkbook how much ever one you want for stadiums and, and jerseys and people on your team. I, I'm going to do it. So I think there's nothing standing in the way of the inequality train right now because big money people, like, it's not like it's, it's not taboo anymore to just push your money. It used to be like we're going to do behind the scenes a little bit now it's just everywhere.

[Michael Batnick]

Yeah. All right. So, I mean, capitalism has lifted so much of the world out of poverty. And unfortunately, this is one of. This is, this is. What comes along with it is, is wealth inequality.

[Ben Carlson]

Yes. And it means that I'm going to recruit in the country, so I'm happy.

[Michael Batnick]

But yeah, this is, this is, this is permanent. I guess you got to take the bad with the good.

[Ben Carlson]

I just, I just, my sense is it's going to get worse. That's, that's why I fought on this. Well, they've been making a leap here.

[Michael Batnick]

It's not going to get better unless, I don't know, maybe. Maybe economic policies coming to the White House will improve growth radically. Who knows? Who's to say? I don't know. Hope it does.

[Ben Carlson]

Well, if growth improves radically, people who will benefit the most be the rich people. But I just think there's no stopping this train.

[Michael Batnick]

True. All right, let's talk about driverless cars for a second. I saw our friend Tom Morgan tweeted a video. Joe Wiesenthal did the same thing. And this is such a great example of how.

[Ben Carlson]

We done it yet or not?

[Michael Batnick]

No.

[Ben Carlson]

Okay. Neither have I.

[Michael Batnick]

We don't celebrate good news. By the way, I saw gas for 279, I think, or 289, whatever it was. Is anybody championing low gas? Does anybody give a shit? Do we only talk about things when they're bad? We have, we have actually driverless cars.

[Ben Carlson]

It's pretty amazing.

[Michael Batnick]

And nobody seems to care. Maybe it's because, like, it doesn't. Probably because it's not happening where we are. That's probably why. I don't think they're bad.

[Ben Carlson]

Getting back to that boom book, this is a form of progress if this actually happens and it's a real thing.

[Michael Batnick]

But it is real. It's happening. It's happening in multiple cities and I feel like it's not getting the. This, the magical coverage that it deserves. It's. Holy shit, they're self. They're driverless cars.

[Ben Carlson]

Like 150,000 rides a day or something. Is that the deal? It is. When does this become a political issue where in the future people say, I'm not driving one of these fancy cars, I'm driving my truck and that's it becomes a political issue eventually. Right. Like there's going to be the non drivers and the drivers. I feel like those are the two groups.

[Michael Batnick]

Everything becomes political. But yeah, but it's. We're not talking about enough. It's amazing. Shout it self. Why do I keep saying self? Driverless cars. Self driving cars. That's what I was trying to say.

[Ben Carlson]

All right, I got a lightning round of vacation thoughts for you.

[Michael Batnick]

There we go.

[Ben Carlson]

All right, I got a lot here, so I'm just going to, I'm going to throw a bunch of them out of you. Then I have a big one at the end. So I'm just going to. Stop me if you want. I had my first real experience of being a middle aged dad on vacation. We'd go to the airport. My wife buys a hot chocolate for my daughter and they gave her two on accident. So she just got two of them. She gives one to our youngest and one to our oldest and says here. And I said, wait, wait, wait. And we just sat, sat down at the gate waiting for a flight. I said, that's a terrible idea. Every time you give them hot chocolate, they spill. My wife's like, it's fine, just let them have the hot chocolate. It's vacation. And of course immediately all three kids have hot chocolate all over them. Spilled everywhere. It's on the seat, it's up their pants. Everyone is covered in hot chocolate and my wife's trying to clean it up for you. And I said, you know, I just, I told you. And I just had to be the dad that said, I told everyone, but I get no credit for it. So that was my dad moment.

[Michael Batnick]

Wait, hold on. Question. Like, did you yell? Were you annoyed?

[Ben Carlson]

No, no, I just, I just, I smirked and I said, I knew this was gonna happen. As the dad, I knew this was gonna happen. I just wanna put that out there and let it be known on the record. I said so. And then everyone said, yeah, whatever, we don't care, we'll move on. Number two, why does, why are so many faucets now don't have the H and the C or the Blue and the red for the hot and cold. You get into a hotel shower.

[Michael Batnick]

Such a great point.

[Ben Carlson]

And you have to figure you have to stay there for like 60 seconds and turn it this way and wait. And turn it this way and wait. And you can't just give me an H or a blue and a red.

[Michael Batnick]

Bring back the blue and the red. Ben, you're making sense. Keep going.

[Ben Carlson]

All right.

[Michael Batnick]

I love it.

[Ben Carlson]

We're at an all inclusive resort in Punta Cana. Why do we not have all inclusive resorts in the us? Food, go get it. Booze, go get it. Fridge stocked every night with everything you want.

[Michael Batnick]

I'm guessing because we could get away with it.

[Ben Carlson]

Well, I'm guessing part of the reason is because the labor is so much cheaper. So on a cruise, you go on a cruise, you pay for drinks, but the food is just free. Not free. It's part of the thing. I can't imagine there wouldn't be a premium resort that people would pay for in the US for all inclusive. Just you show up and everything's taken care of. Just having that stress off your back of not like I have to sign for my bill. Figure out this costs.

[Michael Batnick]

Oh, wait a minute.

[Ben Carlson]

Going into it all inclusive, but I'm.

[Michael Batnick]

Going the other way because generally if you have an all inclusive place, you can't have the highest quality ingredients for the food. So it has to be cheaper by definition.

[Ben Carlson]

True. Food's pretty decent. I mean, it's not top shelf, but it's still pretty good. 3. I love. I made this joke on Blue sky the other day. I get a little engagement. I love going to an island nation like this. And they have their own beer. So we have Presidente here. I went to Aruba before. It's Belashi there. They just make their own beer. Like you don't have choices like not Corona or Dos Equis. It's here. You're drinking Presidente and they call it Dominican water here. It's like Steve Jobs with a mock turtleneck wearing the same thing every day. Like, I don't have to think about it. I just know, hey, I'm getting a presidente when I go to the swim up bar.

[Michael Batnick]

So wait, so wait, so when you order a beer, do you just say, can I have a beer? Yeah, give me a second because that's awesome.

[Ben Carlson]

The best time to do a tequila shot as a middle aged person, middle of the day. Not at night, because that's gonna. But middle of the day. I got some FOMO the other day. A million people doing shots during the day. And I went to get a beer and I ordered a shot tequila. My wife goes, what are you doing? I go, but just doing a shot of tequila. She goes, why right now? I'm like, I don't know. Cause we're on vacation. So I ripped a shot by myself. All right, here's another one. Lazy rivers are an elite, elite vacation activity. And more places should have lazy rivers. If there's income inequality and they're a rich person, like, why wouldn't you put a lazy river in your backyard? Instead of a pool, they have. This place has a lazy river. And it's amazing.

[Michael Batnick]

I don't think I've ever been on a lazy river. What is. Describe this.

[Ben Carlson]

It's just it. It's a place. They have tubes and then they have things that push you in waterfalls. And you kind of just sit in the tube, drink in your hand, and the tube goes around this huge thing all the way around the resort.

[Michael Batnick]

Oh, that's great.

[Ben Carlson]

Kids love it. Parents love it. Teenagers love it. Even the grandparents love it. People just floating around the lazy river. Elite vacation activity because you can relax or have fun.

[Michael Batnick]

Is this, is this a Carlson wide family vacation?

[Ben Carlson]

This is. No, my wife's. So my mother and father in law. It's our 50th wedding anniversary, so we even have the T shirts, you know, 50th. And they took everyone. My brother in law and his girlfriend are here and my wife and our kids. So there's nine of us. And so this is celebrating their 50th wedding anniversary.

[Michael Batnick]

Very nice. All right, keep going. I'm enjoying this.

[Ben Carlson]

All right. You know when you go to Chick Fil A and you realize how much better the service is there? And they say, my pleasure every time they serve you. Even Chick Fil A. Chick Fil A, though. Okay, so the service there is 10 times better than any other place. I feel the same way with service in the Caribbean. So when you come down here, the service is amazing. Everyone always has a smile on their face. They're always happy. The service is top notch. And it's so much better service than you get in anywhere in the States for anything. Everyone's always happy. The people are walking around singing and dancing and. All right, one more. We did an adventure yesterday. I sent you some pictures. We went to go in the jungle, like 45 minutes away. We did a zipline course, these huge long zip lines, which was really fun. And then afterwards, we got to hold these monkeys and they give you a bunch of food and they put it on the plate and they put it on your head and the monkeys jump all over you.

[Michael Batnick]

Those monkeys were adorable.

[Ben Carlson]

Squirrel monkeys, I guess. Very cute. And so we drive about 45 minutes into the middle of the jungle in the mountains to get there. And it's going through all these little cities. And the guy is on the speaker on the way there talking about the country and telling us about it. And all these little houses you pass on the way, these little shacks, they're not even houses. They're probably 2 to 300 square feet. And that's all there is, is these houses. And it's a lot of poverty in the country. And the guy was telling us about it. He's saying, see these houses here? Those are middle class. And you look at it, my kids are like, their eyes are wide, going, oh my gosh. And every mile or two that he's like, that's the rich person. They own all the land and all the other people just live here. They don't have any cars. They kind of get bused everywhere. And the houses are very tiny and there's a lot of, you know, trash and it's, it's just not very nice in these places. And the guy says, you know, I think Americans look at this and they feel bad for us and they probably should in a lot of ways. And I looked up the median income here. Annual income here is like $8,000 or something. That's what I found on the Internet. And the guy says, you know what though? We are pretty laid back and no stress. He said, we never have any stress here. And it is funny, they're so happy. You could never go from like the lap of luxury that we lead in America and move into that setting. But the fact that they don't know any different, I guess for the way they grew up. And everyone here is so happy. And that's the crazy thing to me is that even with all those luxuries, this is like the happiest people I've ever seen. It's kind of crazy. And the guy said, we just, he said we don't have stress here. We are not stressed. We hang out, we drink, we relax, we have family, we don't leave nice lives. And we. But we're. No stress.

[Michael Batnick]

Yeah, no capitalism, it's kind of.

[Ben Carlson]

And he's talking about the property taxes too. And he said one of the reasons things are so bad on the infrastructure here is because we don't pay a lot of property taxes. He said, you pay one time tax when you buy a house and then if you pass it down to your kids, they don't pay a tax. So he's like, I'll give my house to my daughter someday. They don't pay taxes. And he said that's one of the reasons.

[Michael Batnick]

But yeah, again, one of the diseases of capitalism is like, the desire for more. And it's, you know, it's great for all of us, but it's sort of tough on each of us because we always want more.

[Ben Carlson]

It's just, it's one of those perspective things that.

[Michael Batnick]

Yeah, anyway, for sure.

[Ben Carlson]

That's all I got for my travel thoughts.

[Michael Batnick]

All right. The boardroom tweeted, thank you for that, Ben. That was great. Boardroom tweeted. New York and New Jersey are in a league of their own when it comes to sports betting. New York did $2.33 billion in money wagered, I think, so far this year. Is that what it's showing? You know, I've been thinking about this. So I've been hot and I've been cold.

[Ben Carlson]

I can't, though, that it's that much more money. You think it's all like, finance people or just everyone in New York just has that mindset?

[Michael Batnick]

I don't know. Yeah, I don't know. I got hose this week. Tough, tough week for. Tough week for me between the commanders and the Texas and who cares? But anyway, so I was thinking, like, let's say that I lose 5 cents of every dollar that I bet. I've been as, as good as $0.03. Suddenly at $0.05, ish. That's the tax that I pay. At some point, I'm going to have to stop gambling, right?

[Ben Carlson]

Like, because with each paying the big.

[Michael Batnick]

Yeah, like with each passing week, month and year, like the. Even if it stays at 5%, the number is just going to keep getting bigger, bigger, bigger. And all of a sudden I look at my cab be like, wait, it's not that much fun.

[Ben Carlson]

So this, this is rolling into it.

[Michael Batnick]

Where does, where does this go? Like, there was an article in Bloomberg about, like, betting in Brazil and there's a higher level of poverty there. So people are, are really stretching to gamble. Like, it's like the lottery on steroids. I wonder if, like, regulation comes back in a way, and the idea of regulation coming in sounds like laughable now, but is this going to eventually become a problem in our society as well? Like, at large? Like, not just, of course, people's lives are getting ruined by gambling. That's not new. But like, is this going to be the type of thing where, like, we have to crack down because it's like start to spread.

[Ben Carlson]

Maybe there'll be more gamblers and honors. I think it's just going to be the kind of thing where someone goes, well, that 10 of the population has an addictive personality. They're going to get addicted anyway. Hopefully we take care of them. And I don't think people are going to care, unfortunately.

[Michael Batnick]

Yeah, I think that's probably. I think that's probably right.

[Ben Carlson]

So this is a funny email. I came to Animal Spirits a couple years ago and decided to listen to the first episode this week. Pretty funny hearing Ben reveal his bitcoin ownership. I forgot this when I talked about it. And Michael saying he doesn't trade stocks and hopes he never will. Now you're talking about gambling. I thought that was pretty funny.

[Michael Batnick]

Oh, yeah. No, no. You know what? Let's get. No. He also says, wanted to get your thoughts on an email etiquette situation. Big email etiquette guy over here. Someone reaches out to you asking you to provide times you have availability for meeting. You respond to that person saying that the times you are available. And then they respond saying, this time and day works for me. But they don't schedule the meeting. It feels weird that I now have to schedule the meeting that they originally asked for.

[Ben Carlson]

Yes, if you say 100%.

[Michael Batnick]

Right.

[Ben Carlson]

If you say the 15th at noon works for me. Then you just have to say, I'll send an invite. Yeah, yeah. Or you just send the invite.

[Michael Batnick]

Yeah, okay. All right. Another good email. I started reading Extra Life, A Short History of Living Longer by Stephen Johnson. By the way, Steven Johnson, great author. If I ever read fiction nonfiction again, by the way, I was looking at my books the other day and I'm like, oh man, there's a bunch of books on my shelf that I haven't read. Like, I would love to have been meaning to, but realistically, I don't know if it's ever going to happen.

[Ben Carlson]

It's hard. I do get most of my reading done in an airplane, but it's hard to find the time anymore.

[Michael Batnick]

Who has 40 hours or however many hours? I don't know how long it takes me to read a book, but I don't have that time. Okay.

[Ben Carlson]

I'm going to start a new publishing company called Hundred. 100 page books. Nothing more than 100 pages.

[Michael Batnick]

It masterfully tells the story of how human life expectancy has grown over the last 400 years. And anyway, the point is one question this all got me thinking about. At what point in reading a book is it Fair to recommend it to someone else halfway fully read. Such a great question, because, Ben, I've got a show that I started that. It's called man on the Inside. Now it's the number one show on Netflix, so it's probably safe to recommend. It's Ted Danson. Are you familiar with this?

[Ben Carlson]

No, I haven't watched it. I've seen it on the ads.

[Michael Batnick]

Okay. I laughed out loud three times in the first episode, 30 minutes, pretty good sign. The second episode, third.

[Ben Carlson]

I think for a book, you have to go all the way through. You do feel. Because I've done that before, I've been halfway through a book and I said, you have to read this. And then it kind of tails off and you go, oh, shoot, I jumped the gun on that.

[Michael Batnick]

Okay. But I think that happens with shows all the time too.

[Ben Carlson]

Yes.

[Michael Batnick]

Right.

[Ben Carlson]

I, I, we finished the old man in FX season, second season.

[Michael Batnick]

How was it?

[Ben Carlson]

I like the first season. The second season, it just, it was the total horse meme of great horse cartoon. The end of the season, it was, my wife and I were like, wait, what? That's how it. And Jeff Bridges and John Lithgow and it was just, ugh.

[Michael Batnick]

Did you watch the Penguin, by the way?

[Ben Carlson]

I'm halfway through it.

[Michael Batnick]

Okay. Okay, I like it.

[Ben Carlson]

I'll save my thoughts when it's done.

[Michael Batnick]

Ben, recommendations? What do you got?

[Ben Carlson]

Okay, so on the way down here, I watched Deadpool vs. Wolverine and I texted you and I said, this movie is totally unnecessary. It doesn't need to happen. But I still enjoy it. It's very entertaining. A very good plane movie. It's just Ryan Reynolds for two hours, just riffing, telling jokes. And it's again, totally unnecessary. But I can't believe the amount of celebrity cameos in it. There was a ridiculous amount of big name celebrities in this movie.

[Michael Batnick]

So this screams airplane movie.

[Ben Carlson]

Definitely. And I was laughing. My kids kept being like, what are you laughing at? And I'm like, oh, it's Ryan Reynolds. He's, he just, he gets me.

[Michael Batnick]

And he tickles your funny bone.

[Ben Carlson]

He's, his sarcasm is just perfect. And yes, again, it's like the whole movie doesn't necessarily have a point. It just if not necessary. And it's still funny. I finally feel necessary. I mean, it's just, it's, it's, yeah, but as far as superhero movie goes, I would rather watch that than. It's just, it's so self aware that it's really well done.

[Michael Batnick]

I was about to say, is it necessary that I drink my Own urine, which is a joke that I've used on the show multiple times.

[Ben Carlson]

What does that say?

[Michael Batnick]

I know you're not. I know you're not a dodgeball fan. That's patches of hoolan.

[Ben Carlson]

Okay. I finally finished Slow Horses season four, and it's the worst of the seasons, and it was still a great show. The last episode was great. Hugo Weaving plays the bad guy this year. Really good twist at the end. It's just. I think it's the best. I think Gary Oldman gives the best performance of any TV actor in the 2000s. He is amazing as Jackson Lamb. So Gary Oldman is amazing in this. And no one watches the show. I feel like, okay, the best show on TV right now.

[Michael Batnick]

You know what? I respect you for saying that. I'm gonna dive in. It's been on my list.

[Ben Carlson]

Just give it. The first in each season is six. Whoa, whoa, whoa, whoa, whoa.

[Michael Batnick]

Give it. What? Give it. What?

[Ben Carlson]

But I'm just saying give it a shot because it's only six episodes.

[Michael Batnick]

Okay, I thought you. I thought you were to say, like, give it four episodes until it gets going.

[Ben Carlson]

The first one starts after the first episode. It's off and running.

[Michael Batnick]

Okay. Okay. So the guy who. Who we met last week at the Chicago Live event, his name is not James, it's Brian. And Brian emailed us with a list of movie recommendations, all, like these horror movies that he likes to watch. And one of them this may be this killed me was Dude Bro, Am I getting this? It's Dude Bro Massacre Party three or something like that. Dude Bro Massacre Party three. And he wrote in parentheses, there is no one and two. Okay, I did not see that movie, but shout to Brian, okay, I tried to take my kids to see Wicked on oh, really? Sunday. And guess what?

[Ben Carlson]

Sold out.

[Michael Batnick]

Could it get seats? The only seats available were, like, first row. And there was one theater had a time every single half hour.

[Ben Carlson]

So I'm surprised that you don't walk into the movie theater like the regular, like at Cheers. And I go, hey, Michael, take your usual seat in the front.

[Michael Batnick]

So you love to see it. And it's getting great reviews.

[Ben Carlson]

So Eric Davis, I just can't wait to see it. My wife took them to see the play and they love it, so they can't wait to see the movie.

[Michael Batnick]

Yeah. So I'm going to take them on Friday. So Eric Davis tweeted. Wicked wins the weekend with 114 million domestic, 164 million worldwide. That is the biggest opening ever for a Broadway adaptation. The third Biggest opening of the year and the fourth biggest opening for a musical worldwide and the biggest pre Thanksgiving weekend since 2013. And also Gladiator did some numbers at the box office. It's getting mixed reviews, which makes me sad. I haven't seen it yet.

[Ben Carlson]

I will see it, but I kind of wish they didn't do it.

[Michael Batnick]

Well, okay, so. So. Oh, there's a new Taylor Sheridan show on Paramount. Plus, at least that's where I'm watching it, called Landman. It's with Billy Bob, Jon Hamm, Ali Larder. Remember her from Varsity Blues?

[Ben Carlson]

Yeah.

[Michael Batnick]

She's now much older. Because we're much older. I don't know if I'm about to say this without getting in trouble, but this is. This is. You know what? I don't know why I wouldn't be able to say this. This show is more for men than for women. Okay.

[Ben Carlson]

I would probably say most Taylor Sheridan shows are.

[Michael Batnick]

Okay.

[Ben Carlson]

I'm almost ready to give up on Yellowstone. It's.

[Michael Batnick]

You're still watching.

[Ben Carlson]

It's the last season. I thought I'd give it a try, but.

[Michael Batnick]

Okay.

[Ben Carlson]

I mean, the guy does like 12 shows. How can any even be that high quality? I give him credit for doing it.

[Michael Batnick]

But first for you, Susan. Yellowstone are some of my favorite television. Until it. Until it. Horses.

[Ben Carlson]

I don't think I'm gonna try Landman. I'm sorry. I've watched a bunch of his other shows. I like the Yellowstone, but it's.

[Michael Batnick]

The quality's not that great, but it's, you know, it's a. It's.

[Ben Carlson]

It's fun enough entertainment. Okay?

[Michael Batnick]

It's fun enough. It's. It's. It's brain candy or brain garbage. I don't know.

[Ben Carlson]

I can't believe we made it on this. Because I'm doing this podcast from the 3G cell phone network here. Cause the WI fi was a little spotty on my phone. Can you imagine that? We can do Internet from our phone in a different country to do a podcast.

[Michael Batnick]

Wild.

[Ben Carlson]

It's wild, right? Yes. I made it. All right. The lazy river is calling me.

[Michael Batnick]

All right, Ben, enjoy. Thank you very much for taking time away from your family vacation listeners.

[Ben Carlson]

Listen, I need a break from thank Ben.

[Michael Batnick]

You could thank Ben by filling out the survey. All right, Animal spirits at the compound. News, personal emails, personal responses. If you emailed us before, you know what I'm talking about. Thank you, everybody. Thank you, Duncan and the rest of the team for producing this. As always, we will see you next week. Oh, wait. Happy Thanksgiving. Okay.

[Ben Carlson]

Yes.

[Michael Batnick]

Happy Thanksgiving. This is a great time of year to be with your family.

[Ben Carlson]

Go Lions.

[Michael Batnick]

To watch the Lions.

[Ben Carlson]

I can watch the Lions here too.

[Michael Batnick]

To watch the Giants gets destroyed. And I'll say this, I'll say this out loud, Ben.

[Ben Carlson]

Oh, the Giants are playing too.

[Michael Batnick]

I'll say this out loud. My highest conviction bet of the year. Moneyline Lions. Moneyline Cowboys. It's minus 130, so there's a bit of a vig. If this doesn't work, I'm putting multiple units on this. If this doesn't work, I'm gonna hang my cleats up for the season. How about that?

[Ben Carlson]

Just be careful. The Lions have been known to blow games on Thanksgiving, but I'm fingers crossed.

[Michael Batnick]

We'Re new to the Bears. The Bears are not gonna score more points on the Lions and I'm pretty sure that's how football works.

[Ben Carlson]

All right, See you. It.